Age Concern Financial Partnerships has called for more clarity and simplicity in the Government's pl...
Age Concern Financial Partnerships has called for more clarity and simplicity in the Government's plans to provide free nursing in care homes, as well as changes to pension rules that would allow pensions to provide long term care benefits.
Speaking at the Continuing Care Conference, Chris Ellicott, technical manager at Age Concern Financial Partnerships, said improvements must be made to the long term care funding system if the public is to be encouraged to plan ahead. He said: "The system must be understandable and consistent and this means having no anomalies."
While the offer of free nursing care could reduce costs, forward planning will remain difficult. It will be impossible to ascertain levels of nursing care required during retirement planning and once in a nursing home charges will not be consistent as they will change in line with the individual's health.
This could remove, rather than add to the certainty of long term care funding. Ellicott said: "Nursing care will be assessed on an individual level and trying to work out this cost in advance will be difficult. People will not know how much they are responsible for until they enter the home and their health needs change. If they improve and need less nursing care they will receive more hours of personal care and so their bill will rise."
Ellicott said that changes to pensions rules would make it easier for people to pay for long term care. "Pensions are ultimately there to help pay the bills during retirement. If you need cash for care and the pension cannot provide it, then it is not fulfilling its job."
"Annuities need to be flexible enough provide extra cash for this need. They could be set at outset so that people receive less in the early years and get more if they need long term care."
Legislation itself would not need to be changed to facilitate this, but the Inland Revenue would need to amend its rules.
The Institute of Public Policy Research (IPPR) is currently investigating how the fit between long term care and pensions can be improved.
Ellicott also suggested that the long term care market could be widened with the launch of home-only long term care plans.
He said: "When you buy insurance the starting point is usually the cost of the care home, even though most people would prefer to stay in their own home. With insurance three quarters of people failing three activities of daily living still live at home."
As a result it may be easier to sell plans that are marketed as a means of helping people stay in their own home. "This way people are buying something they want, rather than something they do not want," said Ellicott.
