Following our event in June ‘Understanding Equity Release and How it Can Help You to Educate Your Clients’ we caught up with Jacqueline Berry, Founder of My Care Consultant, who was a speaker at the event.
There is an increasing number of people using equity release to fund care costs in later life and so we want to help shed some light on the care sector and the importance of planning ahead for this eventuality, and Jacqueline is best placed to highlight exactly that.
What is My Care Consultant and how do you help your clients?
My Care Consultant is a care navigator, we work with people that need care and their families to help them navigate the complex social and health care system. We take a unified approach to helping people understand the value of professional services such as legal and financial advice, and signpost to these. We also work closely with financial advisers to help them deliver a joined-up approach to their financial planning.
I founded the company in early 2016. I have unique experience of having worked for a major care annuity provider, being CF8 qualified, having dealt with financial advisers for over a decade in this space, whilst also having extensive experience of dealing direct with the public.
What are the biggest challenges facing the care industry today?
There are several challenges we encounter within the care industry however; the main issue we find derives from the lack of understanding from the public. There is a real public misconception that social care is free, so most people tend not plan for it and they don’t realise how expensive it can be. Sadly, most people find themselves dealing with a care need, usually on behalf of a loved one, at a ‘critical need’ point, which can be stressful, confusing and can lead to suboptimal outcomes as most people don’t have any experience of navigating the system.
We have an ageing population in the UK. Studies show that we are living longer, with more of us developing social care needs in later life. This is putting pressure on the NHS and Local Authorities, however, despite increasing needs, there has been a 60p in the pound reduction in central government funding over the past 8 years (with only a small % of this clawed back by increases in council tax). Arguably, some of the issues we face are a reflection of the huge funding challenges Local Authorities have face in recent years.
There is also a political challenge. It’s clear that the political challenge of mending what many see as a broken care system is a tin can that many governments have placed in the ‘too difficult’ box and kicked down a lengthy road. I’ve now lost count of the number of times and dates the much-awaited Green Paper on Social Care funding has been postponed in the wake of Brexit. Even when the Green Paper does see the light of day, many will know that it will not be a roadmap for future change in terms of an agreed proposal, more a series of proposals for consultation.
Likewise, what are the most common problems that your clients face in the process of seeking care?
In an attempt to give people better access to support, as part of the 2014 Care Act, Local Authorities now have to offer a social care ‘needs’ assessment to all who request one, regardless of whether they will self-fund their care. In reality however, many people trying to navigate care needs face ongoing confusion and anxiety, as they stagger from one source of information to another. If they are lucky, they will find answers that work for them. If they are not, they can often receive inaccurate or sub optimal advice to their detriment. At My Care Consultant we come across this on a regular basis.
What are some of the funding options available to people needing long-term care in later life?
There are 9 ways to pay for care, these are:
- A Deferred Payment Scheme
- Rental income from residential property
- Equity released from residential property
- Funds released through the sale of residential property/downsizing
- Liquid assets/cash/income
- Pension income
- Long Term Care Insurance Product (LTCI)
- Third Party Top-ups
There are factors that we encourage clients to consider when deciding on which funding option is most suitable for them. For example, their family commitments, the level of care they need both now and in the future and government legislation. It’s really important to deal with a regulated financial adviser that holds the specific care advice qualification, as many people do not fully understand that these financial advisers are the only professionals able to advise on and recommend ‘Long Term Care Insurance’, also known as ‘Immediate Needs Annuities’ that guarantee to pay fees at any required level for as long as they are needed.
Has the role of property in paying for care changed in recent years? If so, how?
Residential property often represents many people’s largest financial asset which naturally puts property wealth at the centre of the debate about how social care should be funded.
The role of property in paying for social care is three-fold:
- Firstly, the ‘financial’ assessment determines how much of the cost of an individual’s care requirements will be paid for by their local authority, depending on their home ownership status, their level of income, capital, and their property wealth, among other factors.
- For those who are self-funding their care, there is the extent to which their residential property can be used to pay for their care, and how it might be used to do this.
- Lastly, the role of property as a constituent part of estate planning.
Property has an increasingly important role to play in funding social care due to the rising demand for it, the increasing need for domiciliary care and the concentration of property wealth being in the hands of older homeowners.
How does the role of giving advice on care interact with services such as equity release, pensions and investments?
This is a very important question and something that the team at My Care Consultant are proactively engaged with.
It is vital that financial advisers offering products such as equity release understand how financial advice interlinks with social care. An example of this is understanding how equity release could affect their state entitlements or how local authorities treat pension income. Advisers must factor in how any care funding decision made now, could impact their future options as their needs change. This is not only important to ensure best consumer outcomes, but also a key part of mitigating the business against risk.
To help address these challenges we have created a members only, online support resource for financial advisers and support staff on care and paying for care, called Care Box. Care Box provides members with a wide range of documents, tools, and guidance, aimed at helping financial advisers to achieve an integrated approach to their financial planning. Care Box was launched following huge demand from advisers and clients alike – a need for one, regularly updated and replenished resource on care and paying for care topics, held in one place.
You can sign up for a 1-month free trial of Care Box by clicking here (no payment details required).