Member News
Continuing their investigation into the financing of social care, the health committee met this morning with representatives from think-tanks and the insurance industry.
Chair Stephen Dorrell (Con, Charnwood) sought to determine the types of legislative initiatives the government could propose in order to stimulate the private sector to encourage funding of social care.
The Dilnot report has recommended a cap on exclusion from means-tested support, and it is hoped this may encourage insurers to develop new products to meet a growing demand in the market.
However James Lloyd, director of the Strategic Society Centre, was unconvinced that pre-funded insurance markets would grow in response to the proposed model.
Nick Starling, director of general insurance and health at the Association of British Insurers(ABI), was more positive, believing that certainty in terms of expectations for both the state and the individual could create a more favourable environment for financial services products to develop.
Starling explained that the ABI is working with the Department of Health to clarify the insurance needs of consumers in different life stages, to encourage people to take the right steps earlier in their life to set themselves up for the future.
However, he too conceded that the pre-funded products were unlikely to experience a surge in popularity, as "it's hard enough to get people to save for their pensions".
Chris Horlick, managing director of Care, Partnership Assurance, agreed, believing that "people will not consider planning for it until they realise there is a chance they might have to pay for it themselves".
Horlick believes that public education is the key, and that local authorities have a responsibility to "serve their citizens better" by referring them to qualified financial advisers to encourage personal responsibility.
Andrea Rozario, director general of SHIP Equity release, highlighted the problems posed to social care financing by the ageing population.
As one potential solution, she recommended improving financial literacy on equity release schemes, and encouraged the government to provide certainty around their bearing on state benefits.
However, David Tredinnick (Con, Bosworth) expressed astonishment that the financial services industry was absolving itself of responsibility for communicating the nature of its products to the public.
"Who is your advertising agency? Someone should be fired!" he exclaimed.
Dods Parliamentary Communications Ltd