Around £29 million could be paid in compensation to customers who were sold investment bonds that weren’t suitable to pay their care home fees.

HSBC bank has been given the biggest ever fine by the Financial Services Authority because it gave some elderly customers the wrong advice about investment products through its specialist long term care financial advice arm, called NHFA (the Nursing Home Fees Agency). HSBC is likely to pay £29 million in compensation. The regulator says that advisers at NHBC didn't check customers' attitude to risk and, in some cases, the products weren't suitable for someone of their age.

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The Office of Fair Trading says lenders must take care to make sure people understand loans and debts they’re taking out.

If you have a relative with dementia or bipolar disorder you’ll know that there may be times when they may agree to take on financial commitments and be unaware of the consequences. Some people with bipolar disorder can take on large debts when they are in a manic phase (excessive spending isn’t an unusual result of being in a manic bipolar phase) and banks and lenders don’t always get it right. But publication of guidance from the Office of Fair Trading should mean there’s an improvement.

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If you want to take out a care plan to pay for an elderly relative’s care, what should you bear in mind?

Whilst many people don’t have to pay for their own care, thousands of people do. The problem is we’re not very well prepared for it. According to Aviva’s Real Retirement Report over 70% of over 55s don’t think they should have to pay for care and those who do reckon the cost should be less than £3,500.

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