Adult Social Care
‘Strong support’ across London for boosting social care funding through income tax
A YouGov survey has revealed most Londoners would support an increase in income tax to fund social care https://www.carehomeprofessional.com/london-tax-social-care/
The findings, analysed by BMAS, show widespread support in London for both moderate and significant income tax increases. This would ensure that older people who can no longer live independently receive the social care they need.
Currently, government support is means-tested and elderly people with savings over £23,250 are expected to contribute to the cost of their own care, sometimes even selling their own home to pay for it.
Respondents were asked which of these policies they would prefer regarding the cost of social care for older people who can no longer live independently.
33% of Londoners support a moderate income tax increase, making it the most popular option in the capital.
Surrey County Council plans would leave some paying more for their adult social care
Surrey County Council are looking for feedback on plans that would leave more people paying for their own adult social care. https://www.msn.com/en-gb/money/other/surrey-council-plans-would-leave-some-paying-more-for-their-adult-social-care/ar-AA1JnIJr?apiversion=v2&noservercache=1&domshim=1&renderwebcomponents=1&wcseo=1&batchservertelemetry=1&noservertelemetry=1
Currently in Surrey the council has been charging some residents at a lower rate than legally allowed for support that allows adults to stay in their own homes. This means the organisation is not collecting as much money as it could be.
Now the council is looking to change this, with two new proposals. Sinead Mooney, Surrey County Council’s Cabinet Member for Adult Social Care, said: “Surrey is currently one of the few areas in the country with a more generous charging policy than national guidance recommends for care at home or in the community.
“We’ve effectively been subsidising these care costs for a number of years, but we need to make sure that adult social care remains sustainable for the future.
“We’re a large service, supporting more than 20,000 people at any one time. These proposed changes would bring us in line with government guidance and most other councils, helping us continue to support those who need it most.”
“Before any decisions are made, we want to hear from residents, so I’d really encourage people to share their views.”
Later Life Support
Vitality reveals widespread financial anxiety over later life care costs
New research from Vitality has revealed the significant number of UK adults deeply concerned about how they will afford care in later life, with many feeling unprepared and unsure of their options. https://ifamagazine.com/vitality-reveals-widespread-financial-anxiety-over-later-life-care-costs/
According to the findings, over half of adults (51%) lack confidence in their ability to meet the cost of social care in retirement. This figure rises to nearly two-thirds (61%) among those aged 55–64, highlighting growing insecurity among those approaching retirement. What’s more nearly half of adults (48%) believe that even if they started saving now, the cost of care would still be unaffordable.
When asked how they plan to fund any care they may need, responses varied, with a third (33%) planning to use their savings and a quarter (26%) relying on their pension. Some respondents, 16%, intend to sell their property to cover these costs, while 12% have taken out or plan to take out an insurance policy specifically for this purpose. A smaller, but not insignificant, 11%, believe the state will cover their care costs, and 10% expect their family to bear the financial burden.
Notably, 16% of respondents are unsure how they will manage any care expenses, and 17% have not thought about it at all. These findings highlight the uncertain and varied strategies people have for managing any future care costs, emphasising the importance of having early conversations with advisers to consider options available to them.
Despite some expectation of government support, nearly half of people (45%) anticipate a reduction in government funding for later life care, with one in five (20%) predicting a dramatic decrease.
While nearly a third (32%) of adults express an interest in insurance policies that would help cover care costs in the event of a dementia or Alzheimer’s diagnosis, just 8% say they would speak to a financial adviser about their later life care. This disconnect highlights a critical opportunity, and responsibility, for advisers to proactively initiate these conversations, helping clients understand their options and plan with greater confidence.
Vulnerability
Firms must act now and digitise customer vulnerability to deliver targeted support
Firms planning on providing the FCA’s new targeted support must digitise customer vulnerability processes to both ensure efficiency and comply with Consumer Duty https://ifamagazine.com/firms-must-act-now-and-digitise-customer-vulnerability-to-deliver-targeted-support-warns-morganash/
Referring to the regulator’s recent consultation paper (CP25/17), support services provider MorganAsh says that firms cannot offer the new form of advice without understanding consumers’ characteristics and circumstances – particularly those who are vulnerable.
While the paper sets out the need to define consumer segments with common characteristics, it also confirms that firms need to consider vulnerable customers in segment design and the provision of targeted support. With the expectation to adhere to current guidance, firms still need to comply with Consumer Duty and understand customers’ characteristics.
The FCA’s latest proposals on targeted support aim to bridge the gap between generic guidance and full financial advice, encouraging firms to provide an affordable and accessible alternative. Since just 9% of UK adults received pensions or investments advice in the past year, the proposal is designed to increase pathways, improve consumer confidence and financial wellbeing – all while supporting the government’s growth agenda.
Viewing Consumer Duty through the vulnerability lens
As Nick Hulme, head of the Financial Conduct Authority’s (FCA) department for advisers, wealth and pension, shared at this year’s Morningstar Investment Conference, when they asked firms around 18 months ago, they were startled to get an answer of ‘about 1%’ for retail investment clients. https://www.professionaladviser.com/opinion/4516778/viewing-consumer-duty-vulnerability-lens
In previous research, the FCA found that 49% of portfolio managers and 69% of stockbrokers identified no vulnerable clients at all. Not one.
Clients can be vulnerable in many ways
Given the breadth of reasons why someone might be considered vulnerable these figures seem staggeringly low.
In fact, the definition of ‘vulnerable circumstances’ can include:
- Physical or mental health conditions (either permanent or temporary)
- Life events such as bereavement, divorce or taking on a care role
- Low financial resilience or capability
There’s an often-quoted statistic that half of us will be vulnerable at some point in our lives – but if we’re really honest, we’ve probably all been in a situation where our decisions might not be the best. That may be due to health or emotional reasons, or we simply need to make a big financial decision in an area where we don’t have expertise.
Given the numbers of firms that told the regulator they had virtually no clients who they considered vulnerable, it’s not surprising that the FCA’s Financial Lives Survey found that more than half (58%) of the 4.8 million adults in poor health said they had experienced issues interacting with providers or with managing their finances specifically due to their health condition. Worse, 91% of adults with social or behavioural problems said their condition creates difficulties when interacting with providers or dealing with their finances.
These figures show a critical disconnect and are a reminder that vulnerability is neither rare nor exceptional. It’s common, changeable and requires both proactive recognition and a thoughtful response from firms.
Opportunities to spot vulnerabilities will depend on firm type
Nobody expects all firms to identify and work with clients in the same way. An adviser with a hundred clients, who knows them well and speaks to them personally, is in a different position to a bank with millions of customers who interact only via an app.
The FCA published its guidelines on dealing with vulnerability in 2021 and when the Consumer Duty rules were published they were underpinned with the same guidelines. Essentially, firms must understand the needs of customers in their target market and customer base, embed the fair treatment of vulnerable customers across the workforce, including setting up systems that spot signs of vulnerability, and monitor and evaluate whether these systems are working.
Some signs are obvious – a customer calls you in distress because they’ve lost their job or have been in an accident. Others less so – an older client starts to appear a little confused in meetings, or someone suddenly asks to raise a large sum of money but is vague or unwilling to give reasons. Good financial advisers will look further and investigate whether their client may be starting to show signs of cognitive decline, is being coerced, or has a problem gambling habit.
If you’re not sure whether you’re meeting the requirements, in his speech Nick gave us a good rule of thumb – the parent test. Would you be comfortable if your parent, or anyone you care about, receives the service you offer from your firm?
Bereavement is a critical issue
One of the most difficult situations clients face is dealing with bereavement. It can result in a ‘perfect storm’ of vulnerability. The client is likely to be distressed, and exhausted. They may be dealing with complex administration and unfamiliar paperwork. They may have suddenly inherited a large sum of money, invested in products they aren’t familiar with, held with firms they’ve never heard of. Or they may not have inherited money they were hoping for or relying on.
What’s important is balancing empathy with professionalism. A key aspect of this is bearing in mind that grieving clients may not be fully capable of making clear decisions and so clarity, patience and support are essential.