Independent financial advice and care planning
Under the Care Act, local councils must support people to make informed, affordable and sustainable financial decisions about their care throughout all stages of their life.
The Council also has a duty to signpost people who would benefit from it to independent financial advice. Under the Care Act this means advice which is independent of the Council. This must be done at the earliest possible stage.
Why might you need independent advice?
If you have savings or assets an independent adviser can help you maximise their use. An independent adviser will provide impartial and unbiased information. They should have expertise on planning your care financing and can help you plan not just for now, but also into the future. Planning ahead can help avoid problems, such as having to move care home because it is no longer affordable.
Who might benefit from independent financial advice?
Those who might benefit from independent financial advice include (this is not a complete list):
- Anyone who needs a small amount of money to fund care at home or to pay for adaptations or extensions to their home
- Anyone with an immediate need for long-term residential or nursing home care
- Anyone already staying in a care home and paying for it from their own income or savings
- Anyone acting as an attorney and looking after the financial affairs of someone in any of the above circumstances
- Anyone planning ahead for any of the above situations
Why might you need a specialist care-fees adviser?
You’re not obliged to get professional advice when choosing how to finance your long-term care, however, you may find this beneficial.
A specialist care-fees adviser should help you find a means of funding your long-term care that is:
- Suitable for your needs
- Affordable both now and in the future
- Compatible with your attitude to risk and your financial priorities
Some self-financing options are quite straightforward, while others are much more complicated. A specialist care-fees adviser will help you to compare all your options before deciding which one’s right for you. They will also be able to explain all the costs and risks involved with each product, and should be able to help with other things too, like arranging your will or a power of attorney.
Choosing a financial adviser
Not all advisers will have a clear understanding of long-term care planning. Ask them if they have a CF8 or CeLTCI qualification. These qualifications demonstrate advisers’ understanding of the many issues you may have to consider when it comes to funding long-term care. These advisers are often referred to as specialist care-fees advisers.
Some advisers are regulated. ‘Regulated’ financial advice means that an organisation is regulated by the Financial Conduct Authority (FCA) and must stick to a code of conduct and ethics and take responsibility for the suitability of any product they recommend. Even when advice is regulated it is useful to ask whether the adviser is an ‘independent financial adviser’ (also known as an IFA), who can offer the full range of financial products and providers available, or only offers ‘restricted advice’ focusing on a limited selection of products and/or providers. Restricted advisers and firms cannot describe the advice they offer as 'independent' (though they are independent of Wokingham Borough Council).
Another important distinction is between ‘guidance’ (also called an ‘information only’ or ‘non-advice’ service) and ‘advice’. It is important to understand that while buying an investment product after receiving ‘guidance’ rather than ‘advice’ might reduce the cost, it also means you might not have access to the Financial Ombudsman Service or Financial Services Compensation Scheme (FSCS) if things go wrong.
What will it cost?
The fees of an independent financial adviser can vary widely depending on the complexity of your situation, and the level of advice and types of products they recommend.
In some cases you could pay between £75 and £250 an hour for their services, so it’s important to make sure you ask up-front how much their advice is going to cost, and whether it’s a fixed fee, or based on the time they spend working for you.
You could ask your adviser about splitting their fee into a number of instalments, or paying an hourly fee at the end of each consultation.
What if someone lacks mental ‘capacity’?
A person may lack ‘capacity’ to make decisions on their own. This could be because the way their mind or brain works is affected, for instance, by illness or disability, or the effects of drugs or alcohol. While the person may lack capacity to make particular decisions at particular times, it does not necessarily mean that they lack all capacity to make any decisions at all. In some cases a professional may need to decide whether a person has capacity to make a particular decision or not. In cases where a person does lack capacity, the Council must establish whether a person has a deputy of the Court of Protection or a person with Lasting Power of Attorney acting on their behalf.
Lasting Power of Attorney (LPA)
This is a legal document that lets you (the ‘donor’) appoint one or more people (known as ‘attorneys’) to help you make decisions, or to make decisions on your behalf.
This gives you more control over what happens to you if, for example, you have an accident or an illness and can’t make decisions at the time they need to be made (you ‘lack mental capacity’). You must be 18 or over and have mental capacity – the ability to make your own decisions – when you make your LPA.
There are 2 types of LPA:
- Health and welfare
- Property and financial affairs
You can choose to make one type or both.
Deputy appointed by the Court of Protection
You can apply to become someone’s deputy if they ‘lack mental capacity’ - this means they can’t make a particular decision for themselves at the time it needs to be made. They may still be able to make decisions for themselves at certain times.
People may lack mental capacity because, for example:
- They’ve had a serious brain injury or illness
- They have dementia
As a deputy, you’ll be authorised by the Court of Protection to make decisions on their behalf.
There are 2 types of deputy:
- Property and financial affairs, eg paying bills, organising a pension
- Personal welfare, eg making decisions about medical treatment and how someone is looked after
You can apply to be just one type of deputy or both. If you’re appointed, the court will tell you exactly what your responsibilities are.
Information relating to responsbilities can be found on the UK Governments website
Appointee for someone claiming benefits
You can apply for the right to deal with the benefits of someone who can’t manage their own affairs because they’re mentally incapable or severely disabled.
Only one appointee can act on behalf of someone who is entitled to benefits.
An appointee can be:
- An individual, eg a friend or relative
- An organisation or representative of an organisation, eg a solicitor or local council
It is important to remember that an appointee can only help with benefits and does not have any powers in respect of bank accounts or private pensions.
Find an adviser & further information
The Society of Later Life Advisers (SOLLA) hold a register of accredited advisers qualified in financial advice, including long term care funding. You can search their directory for an adviser close to you.
Paying for care is a website designed to help individuals make more informed decisions about the arrangements and funding for their long-term care. The site is equally useful for Powers of Attorney and family members and friends and also includes a care cap calculator.
The Money Advice Service is an independent service set up by the government. It provides a free and impartial advice service and provides information on its website, by phone or through live chat. It has useful pages, such as on self-funding long term care and getting financial advice on this.
Wokingham Citizen’s Advice Bureau also provides money/debt advice.