My Lords, I, too, support the amendment. I thank the noble Earl, Lord Howe, for giving us an assurance that this matter can be brought back at Third Reading, which is very helpful to our debate.
As several noble Lords have said, many people find dealing with financial products very complex indeed. They also find the system of social care funding to be complex. How much more complex will it be when the Dilnot provisions in the Bill are introduced? My noble friend made the point that many people misunderstand the current system. Many people think that social care is free at the point of use until they suddenly reach a situation where either they or their relatives are faced with catastrophic issues around long-term care. Even in relation to Dilnot, my noble friend Lord Lipsey pointed out in Committee that many people think there is this cap of £72,000 but, as we know, it is much more complex than that. The £72,000 cap is based on the fee that the local authority will pay for people who are not self-funded, but we know that self-funders, in essence, subsidise those who go into care that is in one way or another funded by the local authority because they meet the means-test requirements. Of course it is not free because there then have to be hotel costs, which Dilnot estimated to be about £12,000 a year. This matter is therefore very complex and many people find dealing with financial issues very difficult.
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I was very struck by a report produced two or three weeks ago by the Association of British Insurers, which looked at annuities. The range of rates of return for annuities is quite extraordinary. The ABI figures showed that people who fail to take advice or shop around for their annuity are settling for retirement incomes that in some cases are nearly a third lower than those they could receive from the best deal. Indeed, the new rates published by the ABI show that the best conventional annuity pays out 31% more than the worst, equating to a difference of more than £1,400 a year in retirement income for a £100,000 pension. The gap between the best and the worst is up to 46% for enhanced annuities available to those with ill health or certain lifestyle characteristics such as smoking.
One would have thought that in the case of annuities, when people have been paying into a fund for years, and when, it is hoped, most retire in good health and full cognisance of their faculties, they would be able to find their way around the system to ensure that they did not stick with just the fund into which they are paying their money but shopped around. However, the evidence seems to be that the public in general find annuities difficult to work with. If people cannot find their way around the annuity world, how on earth can they be expected to find their way around the complexities of finances when having to make very difficult decisions in terms of the cost of care?
I agreed with the noble Lord, Lord Deben, when he pooh-poohed the idea that local authorities should fear making available to members of the public
information about where they might seek regulated financial advice. If we are worried about local authorities becoming liable if they provide information on where people could receive proper financial advice, this is deferring to a risk-averse culture at the expense of the public interest.
I think that there is a consensus around the House that something more needs to be done. I hope that the noble Earl will listen sympathetically to all noble Lords who have spoken and will come back on Third Reading with much more clarity and a reassurance that the Government recognise there needs to be a widespread, effective campaign in relation to financial awareness. We need to be satisfied that people will be able to find their way to proper, regulated financial advice.