The immediate needs annuity market for long-term care (LTC) could be increased to seven times its current size, according to new research.
IThe research, sponsored by market specialists Partnership, found that 40% of all LTC self funders could potentially afford and benefit from an immediate needs annuity (INA), a six of seven-fold increase on current numbers.
Prof. Julien Forder, Professor of economics and social policy at the University of Kent, who conducted the study, estimated £4bn - £6bn is spent annually on private care but the INA market was only £100m.
Prof. Forder presented the results at the Partnership Care solutions conference, and concluded there is significant scope to extend the beneficial use of INAs to self funders currently in residential care.
He also called on the advice community to do more in the face of such a large potential market.
"The reason the system does not work well is the lack of advice in general. A relatively small group of IFAs can offer this approach. We need a better approach to advice," he said.
Chris Horlick, managing director of care at Partnership, added: "This research is extremely important. We believe that immediate care plans have an important role to play in meeting care needs, as typically the decision to enter care is a distress purchase."
