Care Bill [Lords]

Written evidence submitted by Partnership Assurance Group plc (Partnership) (CB 38)

1. Introduction


Partnership Assurance Group plc (Partnership) is the largest provider of Long Term Care annuities , also known as Immediate Needs Annuities (INAs) in the UK. We are a specialist provider of financial solutions for people with health and lifestyle conditions, as well as those suffering from a serious medical impairment.

Partnership and Self Funders

Over the last 3 years, Partnership has sought to engage with the Government, charities, the financial services industry, local authorities, care providers and consumers to develop solutions which enable self-funders for care to access specialist care fees advice.

Self-funders are broadly people who have assets (including property) of over £23,250 in England, representing over 43% of people in the care system. In some areas of the country, the majority of people pay for all their care costs - 55% in the South East, 53% in the South West and 50% in the East of England  . Partnership believes that they are among the most overlooked and underserved people in the care system which they cross-subsidise.

A recent report by the LGiU estimated that 24% of self-funders deplete their assets and fall back on state funding costing councils an estimated £425 million each year in England alone.

Immediate Needs Annuities (INAs)

Partnership is one of only two (soon to be three) companies in the market who provide a product for long term care – this is our INA. INAs guarantee an income for life to fund care costs in return for a one off premium and are designed for adults requiring immediate financial support with their long term care costs. If paid directly to a registered care provider they are tax free. They provide peace of mind for residents and their families because they cover the catastrophic cost of care (as a result of extended longevity) and protect families’ legacies. They are also welcomed by care providers as they cover care costs for life at the private rate and protect Local Authorities for the same reason. The average length of stay in a care home in England is estimated to be around 2.3 years. However, Partnership’s policyholders, who are all self-funders, live on average for 4 years, and 12% live for 8 years or more.

4% of self-funders currently have an INA with an in force market value of £400million. However, research carried out by the PSSRU [1] suggests that 40% of self-funders could both afford one and would benefit from it.

2. The Care Bill

Partnership welcomes the Care Bill (‘the Bill’) which aims to bring together "threads from over a dozen different Acts into a single, modern framework" for care and support.

However, there are concerns that the Bill does not go far enough to ensure that, where appropriate, those who have to pay for all or some of their care (‘self-funders’) receive independent regulated financial advice which could help them find solutions to pay for their care needs. We would therefore like to see provision in the Bill for regulations to set out when how local authorities should facilitate access to financial advice regulated by the Financial Conduct Authority (FCA) for those adults likely to benefit from it.

3. Overview

· We welcome the Bill’s requirement for independent general financial advice for all

· However, we believe it is also important that self-funders benefit from ‘regulated’ financial advice

· Regulated financial advice must be delivered by financial advisers with suitable qualifications who are regulated by the Financial Conduct Authority (FCA). Only ‘regulated’ advisers are qualified to provide advice about care insurance products.

· Regulated financial advisers, with the appropriate CF8 qualification, are also able to provide a holistic service and will ask people a number of questions, including, whether citizens have a power of attorney in place; are getting the non means-tested benefits they are entitled to; how they will meet their care funding shortfall (if any); their use of residential home (whether to let or sell it, or as surety for a loan or equity release product) and the shape and type of financial product to meet care fees.

· Our experience has shown us that people should be actively encouraged to get financial advice – simple signposting does not work particularly at times of acute distress.

4. Clause 4: Providing information and advice

Clause 4 of the Bill (Providing information and advice) currently makes provisions for local authorities to establish and maintain a service for providing people with information and advice relating to care and support for adults; this must include information and advice on how to access independent financial advice on matters relevant to the meeting of needs for care and support.

Although this is to be welcomed, it is essential that local authorities do not interpret this as a signposting exercise, but instead actively help those who have to fund all or some of their care to seek independent regulated financial advice which will ensure that they are presented with the best options for funding their care needs, and prevent them depleting their assets and falling back on state funding.

Our experience has shown us that people should be actively encouraged to get regulated financial advice as simple signposting does not work, particularly at times of acute distress.

Access to regulated financial advice is important:

It is essential that local authorities facilitate access to regulated financial advice for self-funders so they can make informed choices about how best to pay for their care. With the introduction of a ‘cap’ on care costs meaning that all people who require care will need to approach their local authority to start their care account meter running, this will provide a good opportunity to do so, where appropriate.

While there is a clear need for general financial advice which does not require a regulated independent financial adviser (such as how to access non-means tested benefits and the checking of tax codes etc) which can be obtained through a generic website such as the Money Advice Service – we believe that only ‘regulated’ financial advisers with appropriate qualifications can advise ‘self-funders’ for care on insurance products to help fund care costs.

Regulated financial advice:

Appropriate regulated financial advice is advice which is given by a financial adviser regulated by the Financial Conduct Authority who has at least the CF8 Qualification or equivalent. CF8 is a Chartered Insurance Institute qualification which means that the adviser is able to provide advice and recommendations on long term care.

There is also a ‘gold standard’ for advisers, which goes beyond the CF8 qualification. The Later Life Adviser Accreditation (LLAA), administered by SOLLA (Society of Later Life Advisers), is awarded to individual advisers in recognition of demonstrating best practice, appropriate knowledge and older client procedures. was established in 2010 to help put self-funders in touch with regulated financial advisers who can help them to identify the best way to fund their care needs. All advisers have the CF8 qualification, and many also have the LLAA.

Where PayingForCare has been involved with local authorities referring through to their designated helpline, it is common practice for adviser panels to provide an initial consultation free of charge.

5. Clause 34: Deferred Payment Agreements and loans

While the Deferred Payment Agreement is not a financial product, as set out by the Department of Health, Partnership believes that, given it may well be one of the most important financial decisions that an elderly person may have to make in the latter part of their lives, they should in all cases get regulated financial advice. Failure to do so will mean that they might elect for a Deferred Payment Agreement, when a financial product which capped their liabilities in care was the most appropriate choice for them. We are concerned that the failure of local authorities to ensure that this is an appropriately advised decision will leave them open to liability to claims that they have failed to ensure proper and adequate safeguards to vulnerable elderly citizens, who are making this decision at a time which is typically stressful.

6. The Care Bill

Partnership would like to see regulated financial advice included on the face of the Bill. However, we recognise that Earl Howe has stated that advice and guidance under Statutory Instruments is the most appropriate place to give effect to such matters. We would very much welcome this commitment to be delivered.

February 2014

Prepared 5th February 2014