Equity release providers welcome Dilnot report

4 July 2011 | By Tessa Norman

Published today, the independent review recommends that the threshold for council-funded home help and care home places for the elderly and adults with disabilities should be raised from its current level of £23,250 to £100,000 worth of assets.

It also says there should be a lifetime cap on costs, in proposals which would cost an extra £1.7bn a year if they were implemented now.

Andrea Rozario, director general of Safe Home Income Plans, says the trade body welcomes the report’s findings and agrees that a balance needs to be found in the sharing of responsibility for funding social care.

She says: “The Dilnot report is absolutely right: with our growing and ageing population the state is not able to pay for everything, and there is an urgent need to establish a new and more equitable system if we are to stave off the looming crisis.

“For this reason, the government cannot afford to ignore or put aside the messages of this report, as those in previous reviews have been.”

Rozario stresses the need for the government to ensure that people are fully aware of their options for care funding, and points out that the report highlights the importance of increasing awareness about saving for retirement and care early.

She says: “Financial service options such as equity release therefore have a strong role to play in helping people to contribute to their care costs.

“The establishment of a working group, as the report suggests, to look into the development of financial products that will help people to meet the cost of care is to be welcomed and I hope that SHIP will have the opportunity to play a part in this.”

Ian Atkinson, long-term care expert and adviser at Retirement Solutions, also welcomes the proposals.

He says: “This should enable insurance providers to come up with viable products to allow people to protect themselves against future long term care costs. The problem for insurance companies to date has been the unknown liability.

“Retirement Solutions would also like to see greater flexibility in financial solutions for the over 55s, with retirees able to use pensions and annuity products to buy care annuities or pay care providers should their health deteriorate.

“The independent financial adviser’s role in the future will be crucial in enabling their clients to be fully aware of all the options available and make long-term care an integral part of financial planning.”

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