Four in five will need social care at a cost of £30k a year
BRITONS are more realistic now about the true cost of social care with many planning for their old age, financial experts say.
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More than three-quarters in a survey put the average cost of residential care at £30,000 or more a year, while six in 10 expected it to be between £30,000 and £50,000.
The results are in line with the latest figures from the Laing & Buisson Care of Older People UK Market Report 2016/17.
That puts the average at £31,200 a year for residential care, rising to £43,700 if nursing care is needed. It shows Britons have realistic expectations of how much care could cost them, according to the survey by retirement experts Aegon.
Four in five people expect to need some form of residential or social care as they grow older. The survey also found that eight in 10 think the average time spent needing care is over three years while 30 per cent put the figure at more than five years.
This again is close to a recent study by Newcastle University which found men spent 2.4 years on average needing regular care and women three years.
Social care is high on the political agenda. A report by charity Independent Age found just one in 10 MPs in England believes the current system is suitable for Britain’s ageing population.
The Government is soon to consult on how future costs can be shared between the state and individuals.
Steven Cameron, pensions director at Aegon UK, said: “It’s reassuring to see that the reality of these costs is resonating with people.
The state won’t pick up the full tab and failing to plan ahead could have serious implications for inheritance aspirations
“This understanding is a good first step when it comes to planning for retirement and factoring in the years of care that might be required in late life.
“The second step is for this understanding and awareness to be converted into action. People need to be asking themselves how they’ll pay for it.
“The state won’t pick up the full tab and failing to plan ahead could have serious implications for inheritance aspirations.” Other research found the older generations of Baby Boomers and Generation X are less keen to pay for care in old age than younger Millennials.
Just three per cent of the older generations expect to need residential care even though 15 per cent of over- 85s currently do so, according to pensions analysts Hymans Robertson.
Only 18 per cent of Baby Boomers and 30 per cent of Generation X – those born between 1965 and 1984 – think an individual’s property should be used to pay for social care.
But Millennials appear to have a better understanding of the need for residential care than older generations. Twenty per cent expect to live in it, nearly 80 per cent will save for it and 52 per cent are happy for property to be used to pay for it.
Karen Brolly, of Hymans Robertson, said: “Baby Boomers and Generation X need to face the reality that they may need to live in residential care as they age.
“It’s evident they understand the costs but they just don’t think they’ll need it and are simply not saving for it.”