Just Retirement has launched an ‘immediate needs’ annuity for people facing long-term care costs.

The Care Funding Plan provides a regular stream of income – usually paid directly to a care provider such as a residential home, rendering it tax-free – in return for a one-off payment.

Under the Care Bill, introduced in May last year, individuals will soon be responsible for meeting their care costs up to a £72,000 cap if they can afford it, which would be means-tested.

The Bill also set out the responsibilities on local authorities to provide information and support about the types of services available in their area, including how to access independent financial advice.

Just Retirement group external affairs and customer insight director Stephen Lowe said: “Although the government is planning to introduce a cap on care costs, the reality is that the majority of people who want more than basic levels of care in later life are still likely to spend many tens of thousands of pounds.”

The group said its research suggests more than a quarter of people would seek professional advice when planning for their care costs.