Modern life is complex. One tricky area that touches almost everyone in this country is the tax regime. If you are not subject to that, you are most likely involved in the just-as-difficult and fragmented world of benefits, social care and healthcare.
Increasingly, however, many people are having to navigate all these areas at once, especially those with care needs.
Chancellor Philip Hammond’s announcement in January that he has asked the Office of Tax Simplification to review the “particularly complex” inheritance tax system has been welcomed by many, although others have questioned his motives in these cash-strapped times.
The public has been consulted by way of an online survey and opinions have been sought from professional advisers and representative bodies. The consultation closed 8 June, with the OTS expected to publish its report in the autumn.
There has been much speculation about what this report may contain. Will some of the current exemptions and reliefs be axed, increased or reduced? Will it actually be easier to deal with someone’s estate on death as a result?
I do not have a crystal ball but the cynic in me wonders if the recommendations will actually lead to simplification.
In any case, the OTS does not have the power to implement any of the recommended changes – that is up to the government and parliament. And remember, any changes that result in more people paying IHT will be hugely unpopular with voters.
Along with IHT planning, many clients of a certain age turn their thoughts to care: how to fund it and how to balance this against their wishes to leave an inheritance. Younger clients are asking similar questions in relation to their parents.
Creases in the benefits, social care and healthcare systems do not appear to have moved on much since the Dilnot Report in 2011 (the King’s Fund notes that since 1998, there have been 12 green papers, five independent commissions plus various other papers and consultations on the question of funding social care). The system is crying out for reform.
A big problem lies with the local authorities. It does not help that they do not have a uniform approach to assessment and care provision, meaning a client living in one area of the country is treated differently to someone living elsewhere. Sadly, the information they provide is not always accurate, leaving some clients with the impression they are not entitled to any help at all.
This area has become so complex that care navigation services now exist. Among other things, these services help people ensure they receive what they are entitled to, as not all financial assistance in relation to care is means-tested, such as the attendance allowance and continuing NHS healthcare.
As planners, we need to know what costs a client could be facing in order to ensure their hard-earned resources are used in the best way possible and that any planning does not comprise help they may receive from the state.
Unless serious changes are made to the current system of social care in this country, I can see a scenario in the future where we engage with care-navigator professionals in the same way as we do with clients’ accountants and solicitors.
Claire Phillips is partner at First Wealth