The Dilnot Commission’s report into long-term care funding offers the Government a great opportunity to reform the market that it would be ill-advised to ignore. Proposals to cap an individual’s LTC liabilities will come at a cost to the Treasury but a failure to act will cost the country far more in the long run. Changing demographics and the huge burden on individuals facing long-term care costs point to a social care catastrophe if the Government fails to grasp the nettle and push forward with reform.
Negative headlines about another hit to Middle Britain should be ignored by politicians of all sides who need to create a strong consensus if the reforms are to have any chance of success.
With a cash-strapped Government immersed in a public sector battle and bloodied from its NHS reform U-turn, it will be tempting to park Dilnot in the “too difficult to deal with now” bay. This would be a huge mistake. The Government must be prepared to support the reforms financially and communicate effectively with the electorate the message that they will also need to take on greater responsibility.
With a cap in place insurers should be attracted into the LTC market who were previously scared off by the huge liabilities. This month’s Retirement Strategy interviews Partnership managing director Chris Horlick, someone who has long campaigned for radical LTC reform.
As you would expect, Horlick believes the industry has the solutions which will work in partnership with Dilnot’s state reforms.
What Horlick and other insurers will require from Government is a stable framework to give them the confidence to work on products without the worry that politicians will backtrack or change the rules at the last minute.
Too many times in the past, the industry has been led up the garden path by Government proposals which end up being changed or scrapped.
Elsewhere in the issue, The Retirement Partnership managing director Steve Lewis explores some of the advice dilemmas around the new drawdown regime, pointing out that the new flexibilities come with significant adviser responsibilities.
John Greenwood takes a close look at Paradigm Pensions partner Steve Bee’s claims that the upcoming auto-enrolment reforms offer a huge opportunity for small IFAs to move into corporate advice.
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