Brothers, the private bank and investment
house which recently launched a long-term care team, said recent changes to
government rules on care for the elderly make it crucial that individuals
engage advisors to put robust financial arrangements in place.
“If there is one conclusion to be reached, it is that the
complexities surrounding the funding of long-term care mean that financial
advice is essential to enable consumers to understand and plan for the costs
involved,” Chris Roberts, head of desk-based advice, Close Brothers Asset
Management, said in a commentary.
Reforms enacted under the UK
government’s Care Bill – if fully endorsed by legislators in parliament - mean there
will be a £72,000 ($112,000) cap on eligible care costs, applying to costs an
individual has to pay to meet their eligible care and support needs in England. This
would be introduced in 2016. There would also be a rise in means-tested
thresholds. Under the current rules, help with care costs is only available
once assets have fallen below £23,250 but, from April 2016, this will be
increased to £118,000.
“Helping clients understand the real cost of care and how to
plan for it remains a key, and growing role for advisors, especially with the
reforms introducing more rather than less complexity,” Roberts said.
introduction of the cap, the reforms have added further complexity to the rules
around care fees. The need for professional advice has never been greater. The UK’s aging
demographic means that planning for the cost of care is likely to become a
mainstream area of financial planning, and a growing opportunity for advisors.
Reviewing your client base will help you identify where this advice could be
In July, a report by Close Brothers Asset Management showed that
nearly half (48 per cent) of those in affluent households with an
household income of at least £70,000 (around $107,000) worry about
having a high enough post-retirement income to meet their needs.