In Focus: Advice for Women  

Women face later life care funding crisis

Women face later life care funding crisis
Photo: Andrea Piaquadio via Pexels

Women have saved less towards long-term care than men, even if they have a greater need for it later on in life, a senior pensions specialist has warned.

Steven Cameron, pensions director for Aegon, warned women needed to be more aware of the gap between their pension pot and the cost of long-term care later on in life. 

He said: "Women are more likely to require care in later life – on average, they live longer.

"You often find in a mixed-sex couple, that the wife may provide informal care for the husband but if she then outlives him, needs paid-for care [herself]."

With the average cost of a care home estimated at between £600 and £800 a week, according to Age UK, and the full state pension being £179.60 a week, the state pension alone will not be enough to cover the cost of care.

Cameron added: "This means women, on average, should ideally have more saved for both their ‘normal’ retirement but also for their share of any social care they may need to pay for themselves.

"Unfortunately, the gender pay gap and caring responsibilities tend to lead to women having less, even if they need more."

His comments came amid grave concern over the government's rumoured plans to fund social care through an additional 1 per cent of national insurance costs.

Cameron said: "Unlike state pension, I don’t expect there would be any need for someone man or woman to show they had paid NI for a give number of years to be entitled to the benefit."

However, he warned that while the new social care deal should be "good news for elderly",  paying it through increasing NI risked a backlash among workers. 

As reported earlier in September by FTAdviser, pensions and retirement specialists warned that Prime Minister Boris Johnson clearly had not 'read the room' when it came to initial concerns raised about the government's suggestions for social care reform.

Shaun Moore, tax and financial planning expert at Quilter, said Johnson “clearly hasn’t read the room since the plans were last floated and then shelved in July. 

“Those on lower incomes and the young will pay relatively more, and those working over state pension age pay nothing at all. The optics of such a proposal are not great.”