Care minister Norman Lamb has warned against a “one size fits all” approach to regulated advice in long-term care reforms as he rejected calls to improve access to advisers.
Speaking to Money Marketing today after the House of Commons committee stage for the Care Bill, Lamb said long-term care funders should not be forced to use regulated advisers.
The Care Bill forces local authorities to refer people to independent financial advice and information but not regulated advisers.
A number of cross-party peers have tabled amendments to force all self-funders of long-term care to speak to a later life adviser.
Last month, former care minister Paul Burstow told Money Marketing the Government risks the “spectre of a misselling scandal” unless advice played a more prominent role. Burstow said the lack of mandatory regulated advice for the deferred payments scheme was wrong.
Lamb had promised to “strengthen” the role of IFAs in the Bill but now feels his changes have been enough.
He says: “We have to be proportionate, we don’t want a one size fits all [situation] pushing everyone through a tick box exercise that shows you have obtained financial advice. We have to put duties on local authorities to make sure there is access to advice and information. That is a good advance.
“We have amended the Care Bill to strengthen the steer to people to get financial advice – regulated or other. We have got the balance right.”
Lamb wants to improve the handover when local authorities refer self-funders of long-term care to advisers but rejected claims the deferred payments scheme needs mandatory advice.
Under the planned reforms, only those with non-property assets worth less than £23,250 would be able to access the deferred payments system, which allows local authorities to make a loan to people to pay for care. The loan amount is then recovered from their estate on death.
Lamb says advice might be right for some but there are others that can make decisions with information or within their own families.
He says: “Deferred payments are quite different from equity release. It is low cost loan, not commercial, and it covers the cost to local Government.
“It is an attractive proposition. One has to be proportionate about the level of advice needed.”
Speaking to Money Marketing Labour peer and Society of Later Life Advisers president Lord David Lipsey, who has campaigned for self-funders to be referred to advisers, says there remains a risk of misselling.
He says: “Most self-funders would be well advised to consult an adviser who has Solla membership. I also think there is an urgent need to review whether the qualification bar for IFAs to advise on long term care and long term care products is set high enough. If it is not raised, the dangers of a misselling scandal will be real.”