Only 3% of councils point residents towards appropriate financial advice despite rising long-term care costs, a new study has revealed.
Most local authorities (LAs) underestimate the costs for providing care and the report urges them to act now to make immediate savings and create a sustainable care system for the future.
Care funding provider Partnership, which sponsored the research, believes the findings showed that the scale of the problem is significant and highlighted the need for appropriate financial advice for self funders.
The Independent ageing: council support for care self-funders report was produced by think tank Local Government Information Unit (LGIU) and identified the lack of appropriate financial advice for those who fund their own care in later life.
This, it said, cost councils nearly £1bn per year in England as self-funders fell back on the state.
The research surveyed those responsible for care services in the 174 authorities in England and Wales and found that:
• 61% of respondents did not know how many self-funders in their authority fell back on state care,
• respondents underestimated the cost of people falling back on state care by as much as 50% compared with independent estimates of up to £1bn a year,
• only 3% of councils told LGIU that they provide a list of independent financial advisors who could give advice about care funding products,
• 25% of self funders ultimately fell back on state funding.
Chris Horlick, managing director of care at Partnership, welcomed the report and its call for councils to help self-funders to avoid exhausting their own resources by taking a preventative approach.
"Self-funders, those people with assets (including property) of more than £23,250 in England, are among the most over looked and neglected in the care system," he said.
"The fact that 61% of respondents did not know how many of their own self-funders fell back on state care highlights this point. In 2009, 53,000 people entered residential care, yet only 7,000 received appropriately qualified financial advice.
"As the report shows that only 3% of councils told LGIU that they provided a list of appropriate financial advisers, it is hardly surprising that significant numbers of self-funders deplete their capital prematurely, causing huge stress to those people and their families," he added.
Jonathan Carr-West author of the report, added: "Intervening early with information and advice, in particular by signposting self-funders to appropriately qualified financial advisors, will help individuals make better decisions about funding residential care.
"This can be implemented at very low cost, yet the report highlights that only 3% do, despite the fact that is estimated to cost local authorities in England nearly £1bn each year."
