Financial advice on care costs

Access to financial advice on social care costs is limited by mistrust and lack of understanding

Adult social care and financial services sectors share aspirations towards better joint working

The Care Act 2014 made it a requirement for local authorities to provide information on how to access independent financial advice on matters relevant to care and support – but few people in fact do so.

Researchers within the Social Policy Research Unit at the University of York analysed past policy and academic papers, and interviewed members of the public and professionals in order to better understand the barriers people face in this area.

They found mutual desires for joint working from adult social care and financial services organisations were being hampered by poor cross-sector awareness, which fuelled mistrust of one another’s motives.

Members of the public, whose reluctance to plan ahead for care was seen as the single biggest obstacle to seeking advice, also lack knowledge of financial services and are instinctively wary of them, the study found. This caution contrasted with the benefits reported by participants who actually went on to seek assistance from regulated professionals.

Lack of focus

The study’s literature review element found there had been little research focus on financial advice around social care over the last 20 years. An uptick in references within the policy sphere, with the advent of the Care Act, had fallen again because of attention being diverted to the 2015 reforms to pensions.

No academic papers found by the research team took financial advice around later life care as their main focus. Nonetheless, available evidence suggested that barriers to access include poor signposting and suspicion of the financial sector, but that advice from regulated advisors was seen as useful.

Interviews with people involved in giving and receiving advice revealed that, perhaps unsurprisingly, financial-sector experience and personal wealth made accessing advice more likely – with those who had received regulated advice citing a number of benefits.

“Advice could enable people to pay for care not otherwise affordable, through either purchasing a previously unfamiliar product (a care fees annuity) or rearranging finances to maximise assets,” the study report said.

“The financial security offered by engaging a regulated financial adviser could engender a sense of agency, even empowerment, and reduce anxiety about the future among individuals with care needs and their families.”

But other interviewees mentioned advisors’ pushy tactics, or poor financial outcomes from following non-specialist advice – both factors likely to worsen perceptions of the sector.

Family and friends, meanwhile, were seen as valuable sources of informal advice and professional recommendations, but could also generate conflicts of interest, for example on the part of adult children with stakes in an inheritance.

Cross-sector mistrust

The study identified mistrust between the financial and adult social care sectors as a major obstacle to people accessing advice.

“Local authorities could view financial advisers with suspicion because they work on a for-profit basis and are assumed to help self-funders avoid paying for care; these views were shared by some voluntary organisations and care providers,” it said.

A lack of signposting towards financial advisors represented a failure of joint working, researchers said. Despite this, they found good examples of joint working – for instances by councils and information services working together to help self-funding members of the public understand financial information at times of crisis.

All stakeholders, the study found, shared a common purpose: “keeping self-funders self-funding so they could have choices and afford their preferred care for life, without falling back on local authority funding”.

The research team also noted that factors such as ‘choice’ and ’empowerment’ used by the financial sector also echoed terms used in relation to adult social care’s personalisation agenda.

With uncertainty over long-term care policy creating a challenge for all parties, both sectors demonstrated “a desire for cross-sector, cross-party working, and to rekindle the joint working that had fizzled out after the Care Act implementation in 2015”, the study report said.

‘Building blocks for joint working’

Kate Baxter, a research fellow at the University of York’s Social Policy Research Unit and one of the study team, said: “This research shows that an aversion to and ignorance about financial advisers and products acts as a barrier to self-funders seeking financial advice about paying for care. However, people who did seek financial advice described non-financial as well as financial benefits, for example, a sense of empowerment and reduced anxiety.

Dr Baxter added: “There was also a lack of understanding between adult social care organisations and the financial services sector. Cross-sector mistrust was a key challenge, when in fact both sectors aimed to keep self-funders self-funding for as long as possible. Terms typically used in adult social care, such as choice, control and holistic planning, were mirrored by the financial services sector; this common ground can be seen as the building blocks for future joint working.”

Responding to the findings, York council’s Sharon Calline said: “The findings from this study provide important information that can increase understanding between local councils and the financial advice sector, and emphasises common purposes. It is clear that local authorities need to work closely with financial advisers, to ensure that self-funders receive the best possible information and advice. This will enable them to have choice and to be confident that they have made the best use of their resources in providing for the cost of their future care needs.

Full summary findings

NIHR SSCR (2018) Independent Financial Advice About Funding Social Care in Later Life, Research Findings 109, NIHR School for Social Care Research, London.

Further information

This study funded by the NIHR School for Social Care Research and led by Dr Kate Baxter in the Social Policy Research Unit at the University of York.