CARE ACT 2014
The advice and information service of the local authority must include financial information and advice on matters relevant to care and support. Where it is not appropriate for a local authority to provide such information directly, it must ensure people are helped to understand how to access independent financial advice.
AMENDMENT: This chapter has been comprehensively re-written in April 2016 to reflect Bedford practices, and should be re-read in its entirety.
- 1. Defining Financial Information and Advice
- 2. Identifying who would benefit from Independent Financial Information and Advice
- 3. Facilitating access to independent financial information and advice
- 4. Managing Risk
- Appendix A: Regulated Financial Advice
- Appendix B: Financial Jargon Busters
- Appendix C: Staff Briefing
- Appendix D: Examples of National Organisations
1. Defining Financial Information and Advice
Financial information and advice can help people manage their money regardless of how much they have. This includes help with benefit applications, debt advice and money management/budgeting. It is Council policy to support people to access all relevant financial information and advice which can help them manage their finances and pay for their care.
‘Information’ means the communication of knowledge and facts.
‘Advice’ means helping a person to identify choices and/or providing an opinion or recommendation.
1.1 ‘Independent’, ‘Unregulated’ and ‘Regulated’
Independent means independent of the local authority. These services can be provided by charities, voluntary sector organisations, and commercial organisations.
Unregulated means not subject to the rules of the Financial Conduct Authority (FCA). Examples include third sector advice lines and factsheets, online budgeting tools or advice from the Citizen’s Advice Bureau.
Regulated Financial Advice can only be given by providers regulated by the Financial Conduct Authority (FCA).
Some people may be unsure if they want or need independent or regulated financial advice, they should be directed to this page from the Government’s Money Advice Service.
For other people it may be very clear that they would benefit from regulated advice and they may want to go direct to the FCA website and Register of Regulated Financial Advisers.
Depending on their qualifications and permissions regulated Financial Advisers can advise on:
- funding for care home fees;
- funding for care in your own home;
- equity release and other property options including deferred payment agreements;
- retirement planning;
- savings and investment planning;
- tax matters and estate/wealth planning.
ONLY REGULATED financial advisers can give REGULATED financial advice and recommend REGULATED financial products.
Council staff must be clear when passing on information about financial advice that it is information only and not advice.
All regulated financial advisers must have a level 4 financial planning qualification and hold a Statement of Professional Standing (SPS). However, not all FCA-regulated advisers will have an indepth understanding of the care and support system unless they have chosen to specialise in this area.
Where an adviser chooses to specialise, then additional qualifications and permissions from the FCA are required. A list of the qualifications that a regulated financial adviser must have depending on the areas they advise on can be found on the FCA’s website.
Not all regulated advisers will have an understanding of the Mental Capacity Act 2005. Staff should therefore assess separately the need for MCA advice and make suitable arrangements in individual cases (see Mental Capacity).
2. Identifying who would benefit from Independent Financial Information and Advice
Some staff play a particular role in identifying who would benefit from information and advice. These include first contact staff, front line social work and hospital teams, voluntary sector providers of information and advice, local authority finance teams and care providers.
It is important that staff in these teams can explain the benefits of financial information and advice and are clear about how people can access it.
Key life events may trigger a need for financial information and advice, including:
- change in marital / relationship status;
- change in employment status;
- along term health condition;
- failing faculties, including sight, hearing;
- losing a driving licence, applying for a blue badge;
- feeling lonely, isolated;
- taking on a caring role, struggling with a caring role;
- consideration or review of Continuing Healthcare eligibility ;
- application for Power of Attorney / Court of Protection / wills;
- applications to Office of Public Guardian / Court of Protection;
- application for or review of disability benefits, contact with DWP;
- access to work interviews, disability officer support, illness or disability related out of work benefits;
- change or loss of housing;
- use of care home facilities; day centre, day groups, respite;
- entry or release from prison;
- retirement planning;
- entering into a financial contract;
- change or review of top up arrangement;
- review of financial assessment.
The following groups in particular are likely to need independent financial information and advice:
- those individuals and families paying for care (self-funders);
- people affected by the care cap (when it is introduced in 2020);
- informal / unpaid carers;
- people accessing preventative services;
- people considering a deferred payment agreement;
- someone paying a top up fee or entering into a financial agreement;
- those making decisions on behalf of another person.
People may also benefit from financial information and advice relevant to care and support when they are planning for their retirement, making decisions about their pensions or purchasing products like life or health insurance.
Jean is caring for her husband Jack who has been diagnosed with Dementia. She is his main carer and has some help for 5 days a week which they pay for. Jack has £200,000 of his own savings and does not qualify for any financial support from the local authority. The couple also pay for Jack to attend a day centre twice a week which gives Jean a break too. In total, they are spending over £2000 per month on care. Jean is concerned that their money is being used up quickly and is starting to worry about what she will do if it runs out. The care manager should help Jean access information and advice to help her to work through her concerns and put a plan in place to meet Jack’s needs for the future. A regulated financial adviser could help them look at their options for housing and ways of paying for Jack’s care.
Selling the family home and legacy worries:
Mr and Mrs Smith are in their late 80’s and still living in the large house where they raised their family. They have been thinking about whether to move to a smaller house or to live with their son and his wife. Paying for any future care and leaving an inheritance to their family are their main concerns. Mr and Mrs Smith could benefit from regulated financial advice on their housing choices, paying for care and leaving an inheritance.
Care options at home
Ken‘s health is deteriorating but he is very keen to remain in his own home with paid carers who call on him twice a day. His monthly costs for care total around £800 and he is concerned that if he stays in his own home his money will eventually run out. He has been considering selling his house to pay for care and knows of a local residential home where he knows a couple of people but ideally he wants to stay put. Facilitating access to financial information and advice could help him to claim any benefits he may be entitled to. The local authority here have a role in helping Ken to get the financial information and advice he needs to plan how he will continue to pay for his care at home.
3. Facilitating access to independent financial information and advice
Facilitating access means:
- making people aware of specific sources of information and advice and how to use them;
- making people aware which independent services may charge for the information and advice they provide;
- being able to explain the benefits for a person to take independent financial advice based on what is known of their individual circumstances.
Ways of making more aware of financial information and advice include:
- advice clinics / events / seminars;
- developing signposting / referral procedures, training and monitoring for effectiveness;
- local awareness raising including for example; leaflets, posters, parish magazines adverts;
- inserts into applications for blue badge and other correspondence.
- online explanations and detail, which provide contact details of a choice of advisers available locally;
- targeted information on accessing financial information and advice provided as an attachment to a care and support plan at care home admission or hospital discharge.
3.1 Describing the benefits of financial information and advice
The ways someone might benefit from receiving financial information and advice include:
- help with navigating a complex care funding system;
- widening choice by understanding how income and assets can be used flexibly to fund a range of care options;
- ensuring continuity of care by making sustainable and affordable financial decisions at an early stage.
Example 1: ‘Talking to a regulated financial adviser may help you to choose an option that allows you to stay in your own home for longer or help you to afford the care of your choice.’
Example 2: ‘I’m very sorry but I can’t advise you on equity release, you will need to speak with a specialist regulated financial adviser to help with that, they will be able to explain all of your options.’
Example 3: ‘A regulated financial adviser would be able to advise you as to how renting out your home may affect your taxation status.’
3.2 Facilitating access to regulated financial advice
Where appropriate care managers should actively help and direct a person to a choice of advisers regulated by the Financial Conduct Authority (FCA) with the ‘appropriate qualifications and accreditation’. People should be directed to the FCA website Register of Advisors.
Deferred Payment Agreements (DPA): The statutory guidance states that if an authority identifies someone who may benefit from or be eligible for a DPA or a person approaches them for information, the local authority must tell them about the DPA scheme, any charges involved and how it works and suggest that people may want to consider taking independent financial advice (including flagging the existence of regulated financial advice). Where a person is initially accommodated under the 12-week property disregard, the information should be given and arrangements made during this 12-week period.
Property Options: The statutory guidance also makes clear that local authorities should advise people (where appropriate) that they will need to consider how they plan to use their property if they enter into a Deferred Payment Agreement (DPA), whether they wish to rent, prepare for sale, or to leave the property vacant for a period and the potential impact on other people living in the property if a sale is required after their death. It may be appropriate to help people to access regulated financial advice to help inform their decision.
When paying for regulated financial advice maybe appropriate: A specialist regulated adviser would be expected to help someone compare all the financial options available to them before they decide which one is most suitable. This would involve clearly explaining all the costs and risks involved with each advised option and where appropriate a financial product might be recommended which could help for example fund their long-term care which would:
- be suitable for their care and support needs;
- seek to ensure affordability both now and in the future;
- fit with someone’s attitude to risk and financial priorities;
- include making provision for dependents;
- help to manage property;
- make best use of income / savings / capital.
Making financial information and advice accessible: Being able to access unregulated free financial advice is a good starting point, even where someone may benefit from taking regulated financial advice. It may help someone understand why they might benefit by paying for regulated financial advice. Many regulated financial advisers offer some time to have an initial discussion without charging. Staff should explain this so that a person knows they can speak with several advisers and choose the one they feel suits them best. A regulated financial adviser is required to explain their terms of business, including the services they offer, how they charge and how someone can seek redress if there is a need to complain. Adviser’s fees should only be paid when someone has formally agreed to them.
Proportionality and accessibility: Care managers should help ensure that information and advice is proportionate to the needs of those for whom it is provided.
Eve was admitted into hospital having been found on the floor at home by her son, she had fallen during the night and although nothing was broken she was suffering from malnutrition and hypothermia. Having been in hospital for 8 weeks she is now ready to be discharged and is considering a move into a care home. Eve owns her property and wants to sell it to pay for her care. With £12,000 in non- housing assets she may be eligible for a deferred payment agreement (DPA) but is unsure what to do. Eve’s son who is her attorney asks for advice regarding her options.
The local authority provides Eve and her son with a fact sheet explaining how DPAs work. They explain that they may wish to seek further independent information and advice about DPAs and other options available to her. The local authority also makes it clear that she may have to pay for this advice and that a regulated financial adviser would be able to advise her of all of her options including where appropriate financial products. Eve’s son asks to speak with a regulated financial adviser and the statutory guidance allows for a local authority to adopt a variety of proportionate methods of facilitating access, providing that a choice of regulated, qualified and accredited advisers has been offered in a transparent way.
Obtaining financial information and advice for others: A person’s mental capacity must be considered in giving financial information and advice. Any financial information and advice should be presented in a way that is easy for people to understand, clear and without jargon. Those requiring information and advice may not actively seek it themselves. Attorneys and Deputies often need to act at critical moments in people’s lives, where care planning advice will be highly relevant. Care managers should check before providing Information and Advice to a third party whether the person has Court of Protection or Lasting Power of Attorney acting on their behalf. Using online information will often be the primary way of making information accessible to the wider public as well as to people who have care and support needs, their carers, family and friends. However the statutory guidance also makes clear that a disproportionate reliance the authority’s website, or third party websites, is unlikely to meet all the authority’s duties under the Care Act or responsibilities under Equality legislation.
4. Managing Risk
4.1 Working with independent, regulated and unregulated information and advice providers
Independence from the local authority is an important aspect of the provision of financial Information and Advice within the Care Act statutory guidance. This minimises the risks to the local authority should a person be unsatisfied with the outcome.
4.2 Referring to regulated financial advice
Staff should not recommend individual advisers or firms to provide regulated advice. They should only refer clients to the FCA website when they are looking for regulated information and advice. Local authorities are not required or encouraged to refer to a single adviser but rather to provide options from which to choose. It is important to emphasise that the ultimate choice of who a person chooses, or chooses not to use, is that of the person themselves.
Directing the person to a choice of advisers means that it is the person’s decision, or their representative’s, to choose who they may (or may not) seek advice from. This is intended to limit the local authority’s liability for the outcomes of any decisions the person may take on the basis of that advice.
4.3 Considerations for mental capacity: substituted decision making
In providing or facilitating access to financial information and advice a person’s mental capacity must be considered. Presenting information and advice in a way that is easy for people to understand, which is clear and without jargon, and providing support where needed, will help the person to make best use of this information.
The legal framework provided by the Mental Capacity Act 2005 is supported by a Code of Practice (the Code), which provides guidance and information about how the Mental Capacity Act 2005 works in practice. Certain categories of people are legally required to ‘have regard to’ relevant guidance in the Code of Practice when acting or making decisions on behalf of someone who lacks capacity to make a decision for themselves, and they should be able to explain how they have had regard to the Code when acting or making decisions.
These categories are set out in the Code of Practice and include:
- those acting with Powers of Attorney;
- a deputy appointed by the Court of Protection;
- acting in a professional capacity for, or in relation to, a person who lacks capacity;
- people receiving payment for work dealing with people who lack capacity.
The last two categories cover a wide range of people. People acting in a professional capacity include for example social workers.
The issue of the capacity of the person who is receiving information and advice is therefore something that a local authority providing the information and advice service either directly or through a third party arrangement should consider. This should be highlighted to any organisation to whom people are signposted.
Where a person lacks mental capacity the local authority must establish whether the person has any of the following people with legal powers to act on their behalf, as the appropriate person will need to be involved:
- Enduring Power of Attorney (EPA);
- Lasting Power of Attorney (LPA) for Property and Financial Affairs;
- Lasting Power of Attorney (LPA) for Health and Welfare;
- Property and Affairs Deputyship under the Court of Protection;
- Any other person dealing with that person’s affairs (e.g. someone who has been given appointeeship by the Department for Work and Pensions (DWP) for the purpose of benefits payments).
Attorneys and Deputies are very often appointed at critical moments in people’s lives, where care planning advice will be highly relevant. It is common for Attorneys and Deputies to have significant assets to manage. They may well be in self-funding situations, and so getting good investment advice may be key to not only continuing self-funding, but also in meeting the duty to act in the best interests.
Financial information and advice may well be needed at the point that Attorneys and Deputies are appointed. Advising someone to plan ahead and appoint an Attorney may be crucial in terms of their future ability to manage their care package.
If the request for information and advice is on behalf of a person who lacks capacity but the person making the request does not have formal legal capacity then generic information and advice could still be given as this is not intended to provide a recommendation. It may also be appropriate to facilitate access to regulated financial advice.
However in these circumstances any information regarding the financial circumstances of the person lacking capacity should not be shared with the person requesting the information and advice as to do so could lead to liability under the Data Protection Act 2018.
Appendix A: Regulated Financial Advice
Financial Planning: Financial planning is usually in relation to buying a financial product or planning for short and long-term goals. It may require access to regulated financial advice depending on how complexity of someone’s finances and personal circumstances.
Immediate need care fee payment plans: Immediate need care fee payment plans, or immediate care plans, are a type of annuity contract. Simply speaking, an annuity is a type of insurance policy that provides a regular income in exchange for an upfront lump sum investment. In this case, it provides a guaranteed income for life to fund long-term care, also known as an immediate needs annuity
Equity release: Equity release describes a range of products only available to people typically over the age of 55. They allow you to release the equity (cash) tied up in a home without moving. This gives you a lump sum or steady income. It must be repaid at a later stage when the house is sold. More from the Money Advice Service
Protection insurance: this includes life insurance, critical illness insurance, and income protection all of which can be complex products.
Pensions: There are three main categories of pension: state pensions; company pensions (also known as workplace pensions) and individual pensions. An individual pension is form of saving for retirement that has generous tax benefits and a variety of income options at retirement.
Investment bonds: Investment bonds are life insurance policies where a person invests a lump sum in a variety of available funds. Some investment bonds run for a fixed term, others have no set investment term. When you cash investment bonds in, how much someone get back depends on how well – or how badly – the investment has done.
Reference: Money Advice Service
Appendix B: Financial Jargon Busters
Click here for TLAP Jargon Buster for generic care and support terms
|Regulated Advice||Adviser or firm regulated by the Financial Conduct Authority (FCA)|
|Independent||In this guidance independent means independent of the Local Authority but the financial services industry have another interpretation|
|Independent financial advisers||An adviser or firm that provides independent advice is able to consider and recommend all types of retail investment products that could meet your needs and objectives.
Independent advisers will also consider products from all firms across the market, and have to give unbiased and unrestricted advice.
An independent financial adviser may also be called an ‘independent adviser’ or ‘IFA’.
|Restricted financial advisers||A restricted adviser or firm can only recommend certain products, product providers, or both. The adviser or firm has to clearly explain the nature of the restriction. If you are not sure you should ask for further information.|
|Financial Conduct Authority (FCA)||The Financial Conduct Authority is an independent body reporting to the Government and helps to ensure that financial products offered to the public are fair and meet its required standard. It regulates financial services firms in the UK, including banks and building societies, mortgage and insurance brokers, financial advisers, as well as firms offering consumer credit, (including credit card issuers), payday lenders and debt management firms. It regulates firms to ensure high standards of conduct and will take action if an adviser or firm acts unethically or it finds a serious problem in their conduct.|
|Retail Distribution Review (RDR)||The Retail Distribution Review (RDR) came into force with effect from 31 December 2012 and introduced four key changes.
1. Financial advisers must inform their clients whether they are giving ‘independent’ or ‘restricted’ advice.
2. Financial advisers must now charge the client a fee for providing advice rather than take commission from a product provider.
3. All Financial advisers must be qualified to a minimum of QCF Level 4 which means that they must hold at least the Diploma in Financial Planning
4. Financial Advice Firms must demonstrate that they are treating their customers fairly
|Care Fees Annuity||Also known as immediate needs annuity/ immediate need care fee payment plans or immediate care plans. An annuity is a type of insurance policy that provides a regular income in exchange for an upfront lump sum investment to provide a guaranteed income for life to fund long-term care.|
|Equity Release||Equity release allows someone to release the some of the value tied up in their home without moving. Usually for people aged over 55 years there are two types; borrow money which is secured against your home and repaid after your death (called a lifetime mortgage), or sell part or all of your home (called a home reversion scheme) which can give you a lump sum, a regular income, or both. Products usually allow you to stay in your home for the rest of your life, unless you have to move into long-term care. They may affect entitlement to state benefits or local authority care funding|
Appendix C: Staff Briefing
For many people, their carers, friends and family it is important to have some financial advice to help them make carefully considered plans for later life and to help with the costs of care.
The Care Act 2014 places a duty on local authorities to ensure that information and advice on care and support is available to everyone, when they need it, in an accessible and proportionate way.
The Local Authority must identify people who may benefit from financial information and advice independent of the local authority and actively facilitate access to it in order to help them plan and pay for their care.
Financial information and advice may help to:
- help people to prepare and plan for a care costs and make informed choices;
- prevent people from running out of money;
- provide continuity of care and avoid disruption to residents who may have to move otherwise;
- support their choice of care and support;
- consider the options for a property.
Free local financial information and advice is provided by
|Age UK Bedfordshire||Tel: 01234 360510|
|Bedford Citizens Advice Bureau||Tel: 01234 327262 or 01234 351589 for advice Monday – Thursday between 10.00am and 1.00pm|
|Carers in Bedfordshire||Tel: 0300 111 1919|
|Sight Concern||Tel: 01234 311555|
A specialist Regulated Independent Financial Adviser will be able to provide advice on areas such as:
- long term care funding;
- investments and savings;
- equity release;
- tax planning.
Regulated advisors are able to make recommendations about specific products and will usually charge for their advice.
Q. Does that mean that I can recommend a financial adviser?
A. NO, BUT you should explain the benefits of taking financial advice and direct people to a choice of qualified and accredited regulated financial advisers in a transparent way.
Bedford Borough Council cannot make a recommendation for you to use a particular financial adviser but I can give you information about where to access help.
You could use a directory like Yell.com or just type straight into Google a term like ‘Bedford Independent Regulated Financial Adviser’. This will give you a choice of firms who are available in the area. When you have made your own choice from the information available you should check on the Financial Conduct Authority website that the firm or person is authorised on the Financial Services Register.
This really important to protect your interests. The register also lists unauthorised firms and firms that are known to run scams
Appendix D: Examples of National Organisations
Many national providers of financial information and advice have been developing their services to help with the implementation of the Care Act 2014, most will offer unregulated financial information and advice, some offer online tools and factsheets whilst others are able to offer local partners to deliver more bespoke information and advice services who may also facilitate access to specialist regulated financial advisers where appropriate.
The local authority may decide which of these, if any, suits their strategy for financial information and advice provision, paying regard to independence and transparency.
|General Money Management|
|CAB – Citizens Advice Bureau||Help for people to resolve their legal, money and other problems by providing free, independent and confidential advice.|
|MAS – Money Advice Service||Free, impartial money advice. Advice and guides to help improve finances. Tools and calculators to help people keep track and plan ahead.|
|Which?||Which? Reviewing products and services and also provides free, independent practical advice about caring for older people|
|Pension Wise||A free and impartial government service that helps people to understand their pension options. Providing the pensions Guidance Guarantee|
|National Debt line||Free, confidential and independent advice on dealing with debt problems in the UK.|
|Step change||Provides free debt advice and support|
|GOV.UK||For debt management options|
|Entitled To||Information on income-related benefits, tax credits, contribution-based benefits, Council Tax Reduction, Carer’s Allowance, Universal Credit and how your benefits will be affected if you start work|
|Turn2us||Information on income-related benefits, Universal Credit and tax credits|
|Regulated Financial Advice|
|Money Advice Service – MAS||Provides a directory of regulated financial advice firms who have signed up to the list voluntarily who advise on pensions and related retirement financial matters.|
|Society of Later Life Advisers
|Not for profit organisation, accredits specialist later life advisers provides a register of fully accredited regulated financial specialist advisers easily.|
|Your Money PFS||Provides a directory of regulated advisers by postcode and by qualification / specialism|
|Age UK||A national charity that produces factsheets and gives free advice to older people. Advice line and range of fact sheets and guides and guides to help improve older people’s finances.|
|First Stop||Free, impartial housing and money advice for older people. Advice line and range of fact sheets and guides and guides to help improve older people’s finances.|
|Independent Age||Charity providing information and a national advice service for older people, their families and carers. Information guides and factsheets on the most common issues faced by older people|
|Tax help for older people||A charity that uses volunteers to provide free, independent and expert help and advice for older people on lower incomes who cannot afford to pay for professional tax help and advice.|