Later LifeSep 18 2017

One in five bury heads in the sand about social care

Search supported by
One in five bury heads in the sand about social care

Only one if five people do not expect to need residential social care in their old age, research from Aegon shows.

From those who believe they will need this support, two-thirds think that they would need it from age 80 or older.

The research also shows that 80 per cent of people think average time needing care is over three years, while 30 per cent believe the average is more than five years.

According to Steven Cameron, pensions director at Aegon UK, “It is particularly noteworthy that only one in five people said they do not think they will need residential social care in their old age.

“This means most people need to be asking themselves how they will pay for it. The state will not pick up the full tab and failing to plan ahead could have serious implications for inheritance aspirations.”

The findings also indicated that 78 per cent of people thought the average cost of residential care is £30,000 or more a year, with most of them (59 per cent) expecting it to be between £30,000 and £50,000 a year.

Mr Cameron said: “This understanding of cost 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.”

A report from the Centre for the Modern Family (CMF) published in August indicated that the cost of care is being underestimated by as much as £7bn.

This is also an issue of increasing importance for advisers, with one in five (21 per cent) reporting that helping clients with social care funding is likely to become increasingly important.

According to Mr Cameron, this is “a very complex area and the government is likely to put in place new rules around what individuals will be expected to pay”.

He said: “This is an area we will be following closely as the sums of money involved are significant and individuals will want to understand their savings options.

“As the debate about care costs evolves, getting professional financial advice may help to ensure people are well placed to meet any future costs.”

According to Steve Carlson, chartered financial planner at Cardiff-based Carlson Wealth Management, “there is much greater awareness now of the potential need to pay for social care fees”.

Nevertheless, “planning for it can be difficult as the total potential bill for an individual is unknown,” he added.