Self-funding long-term care residents could still face a bill of almost £200,000 for four years in a residential home under the proposed Dilnot Commission reforms, according to Partnership.
The immediate needs annuity provider feared people may not realise that the proposals only covered care costs but not accommodation fees.
It cautioned that those bills not included could run to two or three times as large as personal care and nursing costs combined.
‘The potential value of financial advice in this arena is clear,' the provider said.
‘An individual with care costs of £1,000 a week will pay £208,000 under the current system if they live for four years, the average life expectancy of a Partnership customer.
‘Under the new system, they would still pay £189,000 over the four years,' it added.
Chris Horlick, managing director of Care at Partnership, explained there was still much confusion around the results.
"There is a significant danger that Dilnot's proposals may have inadvertently lulled self payers into a false sense of security," he said.
"Many may believe that the government will pick up all their care costs once they have paid the first £35,000 of their social care costs. However this is simply not the case.
"The government will only meet social care costs and not hotel costs and general living costs. This is fundamental as these costs are typically two or three times as large as personal care and nursing costs taken together," he added.
The provider also noted that others may also think that their contribution to hotel costs is limited to ‘general living costs' of £7,000 to £10,000 a year.
‘However,' it said, ‘typical fees for many quality care homes can be nearly £50,000 per year which exceeds significantly the standard allowed by local authorities - requiring individuals to top up the difference from other sources.
‘Few consumers appear to be aware that they will have to meet these additional costs and are unlikely to plan for them.'
Horlick also warned another potential area for confusion was how much social care will cost and that those going into care soon would probably not see any benefit.
"Many people going into care now may think that Dilnot's proposals will act as a safeguard for them.
"For most they will not. They will need financial advice immediately if they are not to risk losing significant amounts of capital and income," he added.
