Speaking at the Retirement Income Solutions Forum in London yesterday, Waterson said he welcomed the Care Bill which served to underline the part equity release plays in the role of funding care but he issue with the local authority’s involvement.
He said: “There will be a duty upon local authorities to provide information and advice relating to care and support for adults and support for carers. This service, to be provided by councils, will also involve “signposting” information on how to access independent financial advice. We are pleased the Government has recognised the importance of independent and expert financial advice to anyone exploring care options.
“But in our view it would not make sense to try to up skill local councils to provide the sort of complex advice that rightly goes alongside equity release. Their role should be purely mediatory.”
The Bill also provides details of a government deferred payment scheme which is an agreement under which a local authority agrees not to take the payment for care until a specified date falls due, which may encompass the recipient’s home as security.
Waterson said: “We are working alongside officials to ensure the implementation of this universal scheme is successful. As it stands, the Bill makes no specific mention of information or advice in this context. We are understandably keen to ensure that the same sort of independent, regulated financial advice is required for this scheme as already applies to the equity release sector. This is a view echoed by the joint committee which considered the draft Bill.”
Waterson said there was a risk of a conflict of interest for local authorities between their role as assessors of care eligibility and providers of care, but also advising people on the available options.
At present there is no standardised approach to running the scheme which may result in 152 different schemes in operation nationwide, a prospect Waterson said was “daunting enough, let alone if the scheme is to be unregulated”.
He added: “We need to ensure a level playing field. At the end of the day, why should consumers engaging in the deferred payment scheme be any less protected than mainstream equity release customers?”
Speaking to Mortgage Introducer before the conference, Waterson said: “We have a highly regulated sector and highly regulated members therefore it is quite unfair if the public sector alternative is unregulated which would be bad for the consumer.”