Question for Short Debate (lords) on Social Care - Oct 28

Asked by

Lord Lipsey
To ask Her Majesty’s Government what assessment they have made of the possible role of the private sector in helping individuals pay for social care.

Lord Lipsey (Lab)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper and declare my interest as the unpaid president of SOLLA, the Society of Later Life Advisers.

I think these proceedings are a bit rum. A Conservative Government are proposing reforms to help people to pay for care: the cap and the revised means test. They say that these should be entirely funded by the state. And here is a Labour Peer saying, “No, you have got the emphasis wrong, and you should be looking at what the private sector can do to solve the problem without recourse to public funds.” Let me try to resolve that paradox.

In a nutshell, the problem is that roughly half of those needing care have to pay for some or all of it themselves. When it is just a few months or years for people with some wealth, that does not provide much of a problem. But a minority of the half—one in 10 perhaps—go on living for many years in a care home. That means that they exhaust all but £20,000 or so of their resources. Their children may be deprived of their inheritance. As Andrew Dilnot argued in his excellent 2011 report, these people need some form of insurance. The private sector will not provide that insurance. There has never been and never will be any insurance policy you can buy in advance to pay for your care. Tory voters will be terribly affected by this—those we used to call middle England and in the south of England—so of course the Government want to help out.

There are two central flaws in the Government’s approach. First, the insurance that will be provided by the government cap is not at all adequate. I will not repeat what I said in the care debate the other day, but it will be seven years at least before anyone benefits from it and I think it will only pay one-third or one-quarter of costs at the most. We can debate that another time. Secondly, and more importantly to me, such little support as the cap provides will not go to those most in need. It will go to the better off. They are the ones with lots of assets and therefore debarred from means-tested help, and they will tend to live longer since being wealthy is a key to a long life. The Government’s policy, I am afraid, represents a levelling down: taking from less well-off national insurance payers and giving the proceeds to the better off and their children.

Worse still, by spending money on helping the rich in this way, the Government give away money that could be deployed on a more important task: improving our wholly inadequate care services. As the population ages, adding to demand, supply has got worse and worse as local authorities are cut back. The quality of care is not by any means always adequate. If the Minister will forgive me in his presence, I speak the language of Nye Bevan:

“The language of priorities is the religion of Socialism”.


For me, providing more care takes greater priority than paying for care for the rich.

Can the private sector step in? It is true that the financial services sector has been chary of this space. I mentioned already that it does not provide long-term care insurance. Its excuse for this is risk: what if people live much longer than expected and therefore it has to pay out more? If you think about it for a minute, this is palpable nonsense, because these same insurance companies are going around the place desperately trying to sell life insurance policies, which are subject to precisely the same risks as apply to long-term care policies. Having been around these people for a long time, I am afraid that the real reason is a simple one: it is very hard to sell long-term care policies. Most people out there are pitifully ignorant about care. They may know about pensions, but they do not know about care. About a third of the population still think that the state will pay for it in full. Even those who understand see it as a problem that is far in the future, to be dealt with when the time comes. Persuading them to cough up now for a need that they may well never have is hard work, even for the most seductive of financial services salespeople.

However—a big however—there are a number of purely private financial products which financial services companies offer that can help, and there could be more. A major one is equity release. With house prices having soared, many people have a large chunk of money which they can access through an equity release to pay for their care. They do not have to spend that money on it. They can take out a point-of-use care product when their need arises. Then there is the immediate care cost annuity: you take it out when you go into a home and your costs escalate, and it will pay out for as long as you live. If you live for 10 years, it will pay out for 10 years. If you live for less time, you will not do so well. There are subtle variants on this—for example, policies which refund your premium if you die within a few months of taking the policy out, because some people are frightened that they might be paying something for nothing. For many, the future may lie with a cheaper and more attractive policy: a deferred annuity policy. When you first go into care you pay for yourself, but as you are in care for a longer period—a specified number of years—the policy will step in to pay for the rest of it. That provides insurance as a sort of privately funded cap. These are not the only possibilities. An ingenious correspondent suggested to me that there could be a product whereby you temporarily give your home to a housing association. It will then pay your care fees out of the rent.

These products are making progress but from a very low base. For example, equity release sales have nearly doubled since 2016. The number of firms offering care annuities has gone from two to four. It is growing, but slowly. How do we encourage it to grow? I am SOLLA president because people do not know much about care. When they do find out, they are disinclined to do much about it. There is a role here for more publicity, but the most important requirement is for better advice for more people. I do not just mean publicly provided advice. There is no substitute for an independent financial services adviser—dare I say it, a SOLLA-accredited one. It is very important that we increase the availability of that advice and do not just leave people to go to the citizens advice bureaux. Great organisation though it is, Citizens Advice is not necessarily capable of dealing with these very complicated issues.

We are in a crisis on care, and we are heading towards disaster. We have one group of older people who cannot get care of adequate quality, and their families are up in arms at this total failure of the Government. We have another group—smaller but much more used to getting their way—who want their inheritances protected for their children, who will discover, I am afraid, that Johnson’s cap is not an answer. They are likely to lose the greater part of their assets paying for care and will not be able to fulfil their last remaining ambition, which is to see their children right when they die.

The private sector cannot do everything to put this right. I am not saying that it can but, properly promoted and properly advised, private financial products can do much to take the sting out of the care cost fiasco. I hope that today the Minister will show some sign that he and his colleagues are beginning to wake up to the serious problem that was left after their proposals came out.

13:10:00

Lord Balfe (Con)
My Lords, I thank the noble Lord, Lord Lipsey, for initiating this debate. We have gone round and round on this subject for many years; as the noble Lord said, he was on a royal commission long before I ever got anywhere near this House—indeed, before I ever thought I would.

One of the difficulties is that there is a wide range of social care. Some people who are in need of residential care, which they pay for, are not that far away from people who are in need of care through the NHS or some other public body where it is not even thought that they will pay. There is a penumbra in between. The wide range of social care is also reflected in the demographics of the country. My generation is living longer than any previous one. No member of the previous generation of my family ever lived as long as I have now, so there is a general tendency to live longer.

However, there is also a general tendency to wish not to face facts. It exists in our household, where we cheerfully say to each other, “Well, of course, all our family died of strokes. They haven’t lasted very long. They’re unlikely to need anything other than an ambulance to take them off to the hospital, and they probably won’t come back.” This is a factor when people look at whether they should make any advance provisions for social care. I stress “advance” because, if you are going to ask people to take out insurance policies, the policy will be meaningless for many of them; they will never draw on the policy because they will die in a way that means them not needing its benefit.

I have a limited example of equity release. I must say, there must be a lot of money in it. Two years ago, in an idle fit on a Sunday night, on my computer, I filled in one of those forms that says, “How much could you get for your house if you sign up to our equity release?” I thought, “That’s interesting. I wonder how much I would get.” I filled in the online form; it is the only form I have ever filled in but, since then, I have had a regular stream of offers of equity release on my house—and not only from the people whose form I filled in. It is fairly obvious that the information has been sold off around the industry. Every couple of months, I get an invitation to take up equity release. Clearly there is a lot of money there. I also think that there is a lot of capacity for mis-selling in the equity release market; we probably need to look at that.

Next, the Conservative Party’s proposals are interesting. I am pleased to say that the Conservative Party is a party that looks after the wealth of people like me. In other words, what we are talking about is wealth preservation. When we talk about the cost of care for the elderly, we are actually asking whether we can preserve our wealth, particularly in our house, to pass it on to the next generation. Putting it crudely, that is what this is all about. Of course, for many ordinary people who live in council flats or rented accommodation, there is no pool of wealth; that is the big challenge that we face.

I am afraid that my solution to help individuals to pay for social care is that they should probably pay a sum of money towards it, and that most of the fancy systems devised will prove to have flaws in one way or another; they all have weaknesses. It is the fairest way of all. It may be hard luck on the children but, frankly, if you have built up a sum of capital it is not unreasonable that you should spend it on looking after yourself. After all, you would not say, “I need to save money for my children, so I won’t eat or pay the rates.” If you are unfortunate enough to need some form of care, that should be paid for by the person utilising that care.

I noted the noble Lord’s point about the housing association remedy. That is fine if you are a single person, but it is no good if you have a partner living at home—let alone dependants of that partner—because they will need to carry on living there. You cannot give the house to a housing association and draw money. My not very happy conclusion is that we probably have to carry on not far away from where we are at the moment. It may produce its anomalies, but the anomaly of getting people who have money to use it for their care is not unacceptable. It is not as bad as some of the anomalies that would occur if you tried to tilt the system so that the owners of capital were somehow exempt from using it for their care. It is a rather gloomy prognostication, but it is my conclusion.

I hope that the Minister and the department will be very cautious before they come forward with plans. I warn them that there has been a problem in some continental countries, in northern Europe. Where you go down this slope of free care, you will face enormous bills. Take a day trip to Denmark, and ask about the cost of care for the elderly. They are not only tremendous but unceasing. At the last election in Denmark, part of the debate was about how many baths per week should be provided by the local services that cared for people in their own homes. That is because Denmark has the universal system, but that system will run out of money every time more money is put into it. It will make the National Health Service look a relatively tame organisation. You will find that there will be huge debt if you go down that path. I caution the Minister: he should be very careful.

13:18:00

Lord Desai (Non-Afl)
My Lords, this is a very simple problem but the solution is very difficult. For a long time, economists have talked about what is called the life-cycle hypothesis—how families or individuals rearrange their consumption pattern over a lifetime by transferring some of the future income to the present, as we do in the student loan system and when we buy a house through a mortgage. Mortgages are interesting; all Chancellors stand up and say, “The debt-to-GDP ratio is really very high. Every family that starts with one of at least 300% will have a mortgage.” Everybody knows how to do that.

Our problem is that people do not know how to do the backward transfer. People do not know how to transfer the present value to the future. That is a matter of incentives. Ultimately, there have to be incentives. Building societies evaluate you and give you the money and you pay it off. I spoke on this when we were discussing the extra tax for social care. By and large, the better-off middle classes have a house. The house is congealed capital gains. The question is how you melt that capital gain to make it available without melting it so much that it flows away. I was at that time proposing some form of council tax, which I will not repeat now.

Interestingly, families have assets which they do not want to sell and realise because they want to pass them on. That is one incentive. We have to give them some sort of scheme whereby they would say, “I want to pass on the money that I have to my children, but I don’t want to pass all of it on. I will split it.” How can we give families an incentive to split? Whenever I get up, I propose a new tax, so I will do that. We treat asset transfers to children very lightly; we do not tax them. If we were to say that passing your house to your children would be fine but we would tax it at 40%, which is the higher rate of income tax, or even 20%, the family would ask itself whether it would be better not to preserve the house but to sell it beforehand and split the equity between the family.

I am always autobiographical, so I will say that I am about move to downsize. I have a house in Camberwell that I am about to sell and I shall move to County Hall, which will be easy for inviting all my friends to come to have a drink at my place. That will release cash for me to keep, which is not taxed under current regulations. That is all right; I can do whatever I like. But if, for example, I were to stay in my house and then transfer it, it would not release cash in my lifetime but it would release cash to my children. If the Government said, “That’s fine, but if your children get it you will pay 20% tax”, I would be more encouraged to downsize while living than to wait until I die for my children to get it. This is a very simple thing. We have to give some kind of incentive or disincentive for people to unfreeze their frozen capital gains. If you look at the wealth distribution, that is the largest amount of wealth people have. It is a matter of ingenuity by people who think about taxation.

My noble friend Lord Lipsey, whom I thank for obtaining this debate, spoke about equity release. If you watch television on Saturday and Sunday afternoons, there are adverts for equity release, funeral insurance and that sort of stuff, so there is a market, but I do not think it is a very efficient market. We have to see why that is. What incentives can we give for the market to be more lively? Is there anything we can give to the sellers so that they come up with interesting products? Right now, all they are talking about is how you can be healthy and enjoy the money while you exist and run around in gardens.

A house is a frozen sum of money. How can you melt it, share it with your children and pay for your care? Everybody should be told about this: you are going to need care and you had therefore better provide for it. This is a harsh thing to say, but the existence of the NHS has discouraged saving. We have begun to believe that we do not need to do anything about our health, because it is taken care of. We do not realise that social care is not included in what the NHS does. We can either merge the two and provide them with more money or clearly separate them and tell people that it is not possible to have social care in hospital. It is a different kind of problem.

This is not strictly to do with assets, but about the running costs of social care. It is a slightly tricky business, but many people are cared for by their own family. This is done on a voluntary basis, usually by women. Women end up looking after their husbands, often because they live beyond them anyway, and they do it unpaid. It is extremely hard work, although they may be able to hire people in. Is there any way in which we can create a social dividend income, so that people taking care of an elderly person, even if they are a relative, would get something? It could be like a universal credit or pension payment, but it would be some sort of sustainable payment. We know that carers for the disabled and so on have problems taking holidays and things like that. We know that this happens so, if somebody, whether a man or a woman, can show that they are taking care of their relative, they would get some compensation for doing it and saving the state money. It is basically giving them the money the state saves.

13:27:00

Baroness Brinton (LD) [V]
My Lords, I declare an interest as one of the vice-presidents of the Local Government Association. I congratulate the noble Lord, Lord Lipsey, on securing this important and timely debate, and for his interesting opening statement about a Labour Peer setting out how the private sector can help individuals to pay for social care. These Benches do not have a problem with that principle; if people wish to make provision for such costs, they should be able to. The big issue from these Benches is whether they understand the social care system for which they are planning to cover costs and whether it will be able to deliver when they need to use it.

I also thank the Association of British Insurers for its helpful briefing, which has wide applicability for the general population, as this issue is not just about financial products. The problem is that, for decades, reform and funding of social care has left us with this current mess—or, perhaps I should say, without the reform and changes to the funding of social care, we have been left with this current mess. It was extraordinary that both your Lordships’ House and the House of Commons each had to pass the Health and Social Care Levy Bill in one day, before Parliament could even see the detail of how the levy and new financial structures will work for social care. This is even before we see the Government’s White Paper on social care, which is still due to be published a few short months away—a line the Conservative Government have been running pretty much since 2015, when they refused to implement the Dilnot commission recommendations. This is very odd, given the Prime Minister’s insistence on the steps of No. 10, two years ago, that it was an absolute priority to

“fix the crisis in social care once and for all”.

For the past 30 years, social care has been funded in this peculiar dual way. Those below the income and asset cap get their care paid for, with the further problem of that being divided into the NHS paying for nursing care and local authorities paying for the personal care element and some, or all, of their accommodation and food costs—misnamed as the hotel costs.

All that the new levy announcement does is raise the cap on the savings element—the noble Lords, Lord Lipsey and Lord Balfe, set out the problems here. The cap should be viewed as a solution to avoid catastrophic care costs for individuals and is not a way to enable a private market. A cap in itself will not necessarily prompt a market for financial products to develop. In particular, a product that would dovetail with the cap would be almost impossible to create. As the noble Lord, Lord Lipsey, said, care needs and costs are unpredictable, both for individuals and therefore for insurers. That, frankly, is why there has been some reticence on the part of the insurers over the years to provide a specific tailored product for care needs, as medical progress over time will determine how many people need care and for how long they need it.

Some of the existing products have been mentioned already, but there are care fee plans or intermediate needs annuities; life assurance policies with care cover included; pensions, investment and retirement income products; and equity release and lifetime mortgages. It was fascinating to hear the noble Lord, Lord Balfe, talk about being plagued by people trying to sell him equity release after he had completed a form online. Equity release is already proving to be something of a problem, as such products are being sold to people every day on their television sets and radios for other uses, including their passing on to their children large amounts of money to provide deposits for homes. Some local authorities are now finding that people who started off as being privately funded move into a position of needing public pay once the residual equity has been sorted out with a prior demand from the bank which has offered the equity release. To a local authority’s frustration, when the property is sold after the death of the resident, someone who was thought to be a private payer suddenly becomes a bill that the local authorities has to pay and had no control over commissioning.

What of the future? The noble Lord, Lord Desai, with his usual expertise, set out the wider economic issues facing the public. The first and most fundamental of them returns to the point I started with. Because of the current muddle, we must have a clear state offer from the Government about the boundaries of who will pay what. I add to that a question for the Minister. Is it planned to run an extensive publicity campaign—not just the odd, occasional advertisement, but perhaps a leaflet to every house to raise awareness in advance of the levy being implemented and to explain to people what will be different? I believe that a large number of people think that, by paying the increase in national insurance to fund the levy, they will be exempt in future. As I have said to the Minister on more than one occasion since he took up his post, most people currently think that they do not qualify to have to pay for any element of their social care costs. Even more, virtually everyone is shocked to discover that there are different systems for the nursing element of their care and personal care. It is clear that we will now have to add to that the accommodation and food costs, which are certainly not included in the cap arrangements under the levy.

Any state offer absolutely must be easy to understand, with preferably just one system. The ridiculous system of having clinical commissioning groups and local authorities arguing about whether a patient’s need is caused by a health issue or is a personal care issue, and the divisive and shameful treatment of dementia as a social care issue, must stop. My brother and I are not alone in having to be present at meetings, in our case about our mother, where the NHS and local council argue about the percentage of nursing care versus personal care on the basis of whether it is needed as a result of her stroke or as a result of dementia. We witness this to a ridiculous degree. All sense of the treatment of the whole person is totally lost when different parts of the system spend enormous amounts of time and energy trying to deflect costs to other parts of the care system.

There is undoubtedly a role for the private sector in helping people to pay for social care, but there are two major stumbling blocks to making it happen. The first is that the public and the financial sector need an absolutely straightforward system that the population understands, especially regarding whether they will be covered by state provision or will need to pay for it from their own resources and may want to plan for that, say, from the age of 40. We need state provision that is not used by different parts to deflect responsibilities in payment, calling crises at the moment that people need to use the system. That means a streamlined system. For those who wish to use financial products to fund their care, the Chancellor must also make it plain what people can do and whether they will get some tax breaks for this careful planning. After all, it is prudent planning that will cover costs in future.

The second issue is much more fundamental. As many Members outlined in the debate of the noble Baroness, Lady Pitkeathley last week, we need comprehensive reform, not just structural reform to the care system. We need to think about this as part of the public health of our nation. Housing, health, working life and activity in later life are all also vital to reducing the need for people going into care homes, let alone having extended stays there.

13:36:00

Baroness Wheeler (Lab)
My Lords, I thank my noble friend Lord Lipsey for securing this debate and the opportunity it presents to spotlight the issues he raises in his excellent opening speech on the possible role of the private sector in helping individuals to fund their social care costs. His expertise and knowledge across the whole range of social care funding issues—and on all things relating to social care—is much respected across the House and we are always grateful for his contribution and guidance.

Like others, I have drawn heavily for this debate on the very helpful—or not, depending which way you look at it—briefing from the Association of British Insurers, and on the work carried out examining private insurance as a means of funding social care by our own Economic Affairs Committee two years ago in its report Social Care Funding: Time to End a National Scandal. I emphasise that we would have liked to have seen the Government use that report as a first step and springboard to ensure adequate funding to local councils, so that they are able to provide the standards of care quality that are needed. They must recognise that a plan for future care has to include: funding the provision of personal care in people’s homes to meet the unmet needs of the estimated 1.5 million who need help with washing, dressing, toileting and other basic needs to help keep them living well in their homes and in the community; and working towards ending the disparity between entitlement to free NHS care and the adult social care system, ensuring that entitlement is based on the level of need rather than diagnosis, such as in the provision of free care for cancer but lack of free social care for dementia suffers. The noble Baroness, Lady Brinton, spoke very eloquently on this matter.

Indeed, we have a social care plan that is not a plan; does not “fix” social care, as the Prime Minister promised; places the burden of funding on people who can least afford it; and sets the care cap for two years’ time at a level much higher than the Dilnot recommendation and will not stop people from having to sell their homes—the pledge on which the Prime Minister is fixated and around which his proposals are built.

In the ABI briefing, the criteria set out for social care reforms that would help facilitate what it terms as a more “favourable environment” for insurance schemes have been cited by other noble Lords. They include the need for a clear offer on what the state will provide; an awareness-raising campaign about the means-testing and costs of social care, which it has been calling for since the discussions on the Care Act 2014; an easily understood care offer from the state; helping people to plan for social care costs; adding incentives to encourage people to save and plan for social care and removing disincentives which make saving towards a care plan worth while; and ensuring long-term, sustainable reform to social care that will provide stability for, in the ABI’s words, “decades and not years”.

These key criteria are sorely absent in the Government’s social care proposals. In the words of the ABI, following the Government’s announcement last month, the

“clearer the rules about what the state will provide, the easier it will be for insurers to respond to and support customers with what is not covered”.

Despite the ABI welcoming the Government’s measures as a “welcome step forward”, I am sure that, like many noble Lords, it also has the long memory of the prolonged but fruitless discussions during the passage of the Care Act and of the date for implementation of the care cap being set for 2016, then delayed twice to 2018, and then finally cancelled altogether as unaffordable. Can the Minster confirm that history will not repeat itself, and the cap will not be axed again in 2023 as the health and social care levy is swallowed up by the NHS’s herculean task of dealing with the pre and post-Covid backlog of treatments?

Noble Lords have asked specific questions about the types of financial products that could be made available in the future, such as equity release and intermediate and care cost annuities. On equity release, there have been interesting contributions from the noble Lord, Lord Balfe, and the noble Baroness, Lady Brinton. A lot of financial advisers will say that equity release is only ever worth while over the age of 80. That is generally seen as the only time when it should be considered.

I look forward to the Minister’s response to these issues. Clearly, taking out insurance to cover care costs is not an option for the vast majority of the 1.5 million who need but do not get social care support, which is why the need for state funding for personal care costs is such a key imperative in addressing the current social care funding crisis.

Can the Minister update the House on what discussions are under way on this important issue with the insurance industry? The Prime Minister promised that the Government would be working closely

“with the financial services industry to innovate and to help people insure themselves against expenditure up to that limit”—[Official Report, Commons, 7/9/21; col. 155.]

of the cap. Can the Minister reassure the House that discussions have started? Who is leading them? Will there be regular briefings on the key issues and progress? Most importantly, is he confident that any new products will be in place before the proposed implementation of the cap in 2023? Does he accept that the discussions with the industry are time-critical and need to make rapid progress?

Finally, my noble friend and other noble Lords, both today and in our debates and Statements so far, have asked key questions of the Minister about how the cap is to operate, its sheer complexity, what costs it will cover and other major concerns arising from the close analysis of the figures—such as that by my noble friend, which showed that it will be at least seven years from now before people with care needs in homes or at home will benefit from the Johnson cap. Time is fast running out for the Government to provide the answers that are vitally needed.

13:43:00

The Parliamentary Under-Secretary of State, Department of Health and Social Care (Lord Kamall) (Con)
My Lords, I congratulate the noble Lord, Lord Lipsey, on securing this important debate and I thank him for his well-argued case for the importance of the private sector in helping people pay for care. As he rightly acknowledged, it puts a Conservative politician in an interesting place when a Labour Peer is explaining the benefits of the private sector. I acknowledge his long-standing interest in this area; he brings a wealth of experience to the topic, not least as a member of the Royal Commission on Long Term Care for the Elderly, which in 1999 began the important discussion of how people should pay for their care. We should also be clear, however, that successive Governments, even before then, have kicked the can down the road. Reports have been issued and have gathered dust on bookshelves. I worked for an economic think tank which surveyed a range of views across the political and ideological spectrum—good ideas that have just been ignored for many years.

In that spirit, whatever one thinks of the announcement made by the Prime Minister on 7 September, it marks an important step on the journey to reforming adult social care. We are no longer talking theoretically or about blank pieces of paper. We are talking about a proposal that can be critiqued and, we hope, improved. I hope that in time, with noble Lords’ experience across the House, we will be able to come up with a package that addresses many of the criticisms made today.

The Government’s view at the moment is that the £86,000 cap in England will end the worry that individuals may face unlimited care costs. In addition, anyone with assets worth between £20,000 and £100,000 will be eligible for some means-tested support, helping people without substantial assets. The Government’s view is that the reforms will bring people peace of mind from knowing that their assets will not be wiped out if they end up needing care.

Let me turn to a couple of the points made by the noble Lords, Lord Desai and Lord Lipsey. A few years ago, I read a very interesting article in the Financial Times about financial planning. The journalist asked why we plan for people to build ever larger amounts of wealth towards the end of their lives, then leave it to someone without benefiting themselves; surely we should encourage people to build large amounts of wealth that they then spend towards the end of their lives, including on their own care. That raises some substantial questions, which, I agree, the Government will need to address.

The cap marks an important step in enabling people actively to plan for the cost of their care, and agree that this is where the private sector can play a critical role. Of course, the new cap will protect people from facing unlimited costs and give greater clarity and certainty about what costs they may face. However, I take on board the point made by the noble Baroness, Lady Brinton, about making sure that we have proper publicity and public information. People will need to plan. As many noble Lords have said, to date, too few people think about the cost of care until a point of crisis when they or a family member are affected.

We believe that the financial services industry can play a critical role in helping people to meet their needs and in supporting people to pre-fund their care cost if they wish to do so. As many noble Lords acknowledged, the financial services industry already offers a range of products that can be used to help people to meet their care costs; they may not necessarily be marketed as help for care costs, but they help to build up a sum that can be used for such costs. There will continue to be a landscape of products to meet people’s needs and, we hope, to enable them to fund the cost of their care up to the cap. It is not a one-size-fits-all measure, as the noble Baroness, Lady Brinton, outlined.

Some people may prefer, for instance, to invest in a long-term savings product such as a lifetime ISA, or increase their pensions contributions to make use of their pension freedoms. Others may wish to use some of the products that noble Lords have mentioned, such as immediate needs annuities. Some people may wish to draw on their housing wealth, in consultation with their family, to pay for their care and, as such, make use of equity release products offered by either banks or local authorities through a low-interest deferred payment agreement.

No one single product or approach to planning for care will meet everyone’s needs. Therefore, as the noble Lord, Lord Lipsey, rightly pointed out, quality financial advice will be critical so that people can make informed decisions about paying for their care costs up to the cap. There is already a legal obligation on local authorities to help people to understand how they can access independent financial advice, but we recognise that more is needed. We are working with stakeholders to consider what people need and how the Government can support them.

Noble Lords may think it rather far-sighted of me that, 20 years ago, I started looking at financial products and how I could save for my future. Interestingly, when I interviewed financial advisers, one thing I was advised was that they were not necessarily financial advisers, and that they may well have been financial salespeople trying to sell products. As we ensure that better financial advice is available, we are going to have to be clear about making a distinction between independent advice and the incentive-based sale of products. In many cases, this is where mis-selling has occurred—that is, where the incentives have incentivised the so-called financial advisers to sell an inappropriate product, rather than the most appropriate product, to the person requiring help. With increased demand, and given that this sends a signal that people will have to start thinking about their social care, the Government hope that the market will evolve. I cannot say that for certain because no one can predict how markets will evolve; that is the wonderful thing about spontaneous order, with existing products adjusting and new products developing.

However, as the noble Lord, Lord Lipsey, and other noble Lords acknowledged, this will not happen overnight. We will listen to and work with partners and industry over the coming months to consider the development of financial products to help people to plan for their care costs, in line with the introduction of the cap on care costs in October 2023. The Government have also held initial discussions with the ABI. What is interesting about those conversations is that we were clear that this will not be spontaneous, and that these measures will emerge with time as people start to understand the parameters and the amounts that they need to raise for their future. We hope to continue these conversations with a broader range of sector representatives in the months to come.

I give this pledge to noble Lords across the Committee: I want to learn from the expertise in this Committee. Some very valuable points have been made in this debate. I will hope to take them back when discussing with the Government the future course of the Bill. We will be listening and there is great and deep expertise. As I indicated before today's debate, I would like to have a long conversation with the noble Lord, Lord Lipsey, and others because there are some valuable points being made.

It is important to see the reforms as a package. The noble Lord, Lord Lipsey, said—and this is something we should all be aware of—that this should not be something for the wealthy; it should be for everyone. There is not just the cap, but also a much-extended means test. It is about how we can support people with their care costs right from the beginning and be aware.

The problem with being purely private, as I think the noble Baronesses, Lady Wheeler and Lady Brinton, said, is that there might be some who cannot afford to take out some of these products—those with less or the just about managing. In that case, unless one is a complete anarcho-capitalist, one would see a role for the state to help those who are unable to make those informed decisions.

Regarding equity release schemes, the deferred payment schemes are effectively a local authority-administered equity release scheme and available in certain circumstances. The Build Back Better document says that we want to make these more accessible, better value and not necessarily for profit.

A number of noble Lords asked questions about raising awareness. We have committed to providing information. We want to make sure that those looking to prepare for their own future, or maybe helping their parents prepare for the future, make informed decisions. It is critical that we make sure that they are getting independent advice. I welcome noble Lords’ advice on how we ensure that we make that distinction between advice, objective advice and pure sales. We also want to work on how to improve access to this advice, for example through the citizens advice bureaux.

My noble friend Lord Balfe talked about people paying for their own care. For this Government, it is about balance. We recognise—as I said previously and many other noble Lords have said—that people do not start thinking about this until it is sometimes quite late. We agree that people should pay towards their care, but we want to make sure that they can somehow plan and overcome this issue of unpredictable costs at the same time. How do we get the balance right between personal responsibility and state support for those unable to provide for themselves?

My noble friend also talked about equity release schemes and existing equity release schemes. He made some very interesting points, as did the noble Lord, Lord Desai, on these. We should take them on board.

The noble Baroness, Lady Brinton, talked about the possibility of the insurance market. We agree that the most important point is that the cap in itself will not mean that an insurance market will magically spring up. It will take time for the industry to understand and work through the consequences—particularly the very clever minds in the insurance industry—and then to see what demand there is from the public.

We need to make sure there is a better understanding of who pays for what, as the noble Baroness, Lady Brinton, said. An extensive campaign should be launched. We very much hope once again to draw on the experience of noble Lords across the House in reaching the public. We are finding this with some other health issues. How do we reach those difficult-to-reach markets?

We will publish details of policy parameters later. I will end with a couple of points. My noble friend Lord Balfe talked about Denmark. It is important that we learn from the best and worst international experiences. If my noble friend can send me details of other international schemes, we will look into those.

The noble Lord, Lord Desai, said that women tend to look after men. My wife would probably say that that is not just in old age—I think they start rather young. As my wife says to me, she has two sons but three boys.

I apologise if I have not covered all points made by noble Lords today. If I have not, I hope noble Lords will write to me and follow up. I will try to get the answers if I can. I thank the noble Lord, Lord Lipsey, for securing such an important debate today and thank all noble Lords who have taken part.