HC 271 Money Advice Service

Written evidence submitted by Partnership Assurance

1. Background:

Partnership is the largest provider of Long Term Care annuities in the UK, with circa 75% of the market by policy and premium.

Partnership is a specialist provider of financial solutions for people with health and lifestyle conditions, as well as those suffering from a serious medical impairment. It has a unique mortality data set and is an expert in pricing longevity risk.

It has been a consistent innovator developing this sector by championing the needs of those with even modestly reduced life expectancies. Partnership was judged "Best Long-term Care Provider" at Health Insurance Awards 2009, 2010 and 2011.

2. Introduction:

Partnership welcomes the opportunity to respond to the Treasury Sub-Committee’s inquiry and would welcome the opportunity to submit oral evidence if called upon.

Partnership’s financial services expertise means that it is best placed to respond to "is the MAS reaching its target audience? Are any groups unable to access the MAS’s services? Who is worst affected by a lack of knowledge of financial matters? Should the MAS have a greater role in financial education in schools?"

This response is focused specifically on the 41% of people who are self funders in the current adult social care system having assets (including property) of more than £23,250 in England. We have campaigned for all self funders to receive appropriately qualified financial advice.

3. Summary:

3.1 Self funders represent a large section of the population in the current care system, and in light of the ageing society, this number will only increase. However, there is a serious lack of public awareness around the financial options available to pay for long-term care. Given that this will continue to be a major issue in the coming years, it is essential that self funders are offered financial advice and information.

3.2 Whilst the Money Advice Service does, to an extent, provide advice on paying for long-term care, it is not as informative as it could be. Improvements should be made to the website to ensure that this important section is more accessible to the public, and that the website as a whole is easy to navigate. In addition to this, we would also welcome greater public awareness of information and advice offered by the service.

4. Background:

4.1 A substantial number of people in the care system are self-funders (41%) and are therefore required to pay for their own care. However, many self funders have very moderate wealth and do not possess vast sums of money or assets.

4.2 Unfortunately there is a lack of access to appropriate financial advice and no obvious place for many self funders to get information and guidance on funding long-term care.

4.3 To put this in perspective, of the 53,000 self funders who entered residential care in 2009, only 7,000 received appropriately qualified financial advice. The Local Government Information Unit’s Independent Ageing report 2011 estimates that 25% of self funders deplete their capital prematurely. Partnership estimates this costs the state £1 billion each year (in England alone).

4.4 Many have either purchased inappropriate financial products or have purchased none at all, and have therefore depleted their assets prematurely.

4.5 This cost ultimately falls to individual local authorities, who themselves are facing cuts of 27% to their overall budgets by 2015. However, much of this can be avoided if self funders are given appropriate financial advice and have access to information and guidance.

5. Money Advice Service (MAS)

5.1 Is the MAS reaching its target audience?

5.1.1 Whilst the Money Advice Service website does provide adequate information on a number of financial issues, it does not satisfactorily address financial matters arising from long-term care needs.

5.1.2 The Long-term care section on the Money Advice Service website is difficult to find, and one has to search the website before locating it under the insurance section. For many people with long-term care needs, and their family members who can often be appointed as the power of attorney, it is often a stressful time with a number of important decisions to be made. It is therefore essential that their access to information and guidance is made as easy as possible.

5.1.3 Whilst there is a full page of information on the website, it does not present a clear picture of the current care process in terms of self funding. There is limited information and advice about what to do and where to go if and when long-term care is required. In light of the proposed Draft Care and Support Bill in the Queen’s Speech, we would urge the Money Advice Service to engage with Department of Health officials in order to provide adequate advice of funding for adult social care.

5.2 Are there any groups unable to access the MAS’s services?

5.2.1 There are concerns around the accessibility of the website and the relevant information for self funders of long-term care. In a recent Partnership Care Index, which was produced after 1023 interviews with consumers aged over 45 were conducted (including 100 interviews with those aged 75 and over), only 7% would think to ask an Independent Financial Advisor for care funding advice. This is further supported by data from the ABI which suggests that 48% of people are not aware of what help they are entitled to for covering care costs. This presents a clear picture of the lack of public awareness of both the Money Advice Service’s guidance on this issue, and also one of the general lack of awareness of available information.

5.2.2 Information should be more readily available and the profile of the Money Advice Service should be raised amongst the general public. Efforts should be made to diversify the methods of engaging with the organisation to ensure that those who are unable to access the internet are able to speak to someone who can advise them of their available options. We are aware that the Money Advice Service offers advice over the phone or on a one-to-one basis. However, it is not clear how aware the public are of this.

5.3 Who is worst affected by a lack of knowledge of financial matters?

5.3.1 A growing number of the population requires immediate information on funding of adult social care, however, access to this information is limited. This means that there is a large section of the population who are either unaware or unable to access advice and guidance on how to fund their care needs.

5.3.2 In response to the serious information gap about where to get advice on care options and where to get qualified financial advice, Partnership launched payingforcare.co.uk. This site was developed having discovered that 29million people ‘googled’ the term ‘paying for care’ and 69% turn to the internet for information on care for older people.

5.3.3 With an increasing ageing population, the problems caused by a serious lack of information and advice will only worsen, and it is therefore vital that public awareness of the available options for people with long-term care needs is addressed sooner rather than later.

5.3.4 We do, however, understand that the Money Advice Service is in the process of developing this section of the website and we therefore warmly welcome this.

June 2012

Prepared 15th June 2012