A report from retirement income provider Just Group, based on figures from the Office for National Statistics (ONS), showed the number of those aged 65-plus living in the capital is predicted set to grow from just in excess of a million in 2016 to 1.27 million by 2026.
According to Stephen Lowe, group communications director at Just, “London is in the eye of the storm when it comes to care funding because of the rise in the number of pensioners and the high cost of care in the capital”.
He said: “While it is easy to see this problem coming, finding a solution is proving more difficult.”
Back in December, the government confirmed the proposed £72,500 cap on social care would be scrapped.
Prime minister Theresa May’s predecessor, David Cameron, had promised to bring in an upper limit on the amount people must pay towards their own care, following recommendations of the Dilnot commission in 2011.
But Mrs May's government said a green paper on long-term reform would be published this summer.
However, Jeremy Hunt, secretary of state for Health and Social Care, revealed in June that the document now won’t be published until the autumn.
Mr Lowe also noted that “London has the highest cost of residential care in the UK at £741 a week or £38,532 a year for a single room on average, and popular care homes can charge much more”.
He said: “High property prices in London mean that the over-65s have about £250bn tied up in their homes and the average house price of £491,000 is enough to pay for nearly 13 years of care.”
Mr Lowe argued that one option could be for homeowners to be incentivised by government early in retirement to ‘pledge’ part of the value tied up in their property to be used for their care but only if they need it by offering, for example, tax breaks or some type of matching scheme on any money used for care.
Region | Growth in over 65s* (%) | Average House Price (£) | Weekly Cost of Residential Care (£)** | Years of Care Funded |
London | 24.8 | 491,000 | 741 | 12.7 |
North East | 18.2 | 124,000 | 563 | 4.2 |
North West | 16.4 | 150,000 | 511 | 5.6 |
Yorkshire & Humber | 17.4 | 148,000 | 546 | 5.2 |
East Midlands | 20.5 | 174,000 | 578 | 5.8 |
West Midlands | 15.9 | 180,000 | 573 | 6.0 |
East of England | 20.0 | 279,000 | 673 | 8.0 |
South East | 20.7 | 319,000 | 702 | 8.7 |
South West | 19.9 | 243,000 | 655 | 7.1 |
* Between mid-2016 and mid-2026 |
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Former pensions minister Baroness Ros Altmann has been an active voice in calling for a government response to the social care funding care crisis.
She said: “There is no money set aside anywhere to pay for future care, for growing numbers of older people in our ageing population.
“This has led to a dramatic fall in provision of care, severe hardship for many who need care but have not qualified for state help, and a huge rise in unmet need.”
Baroness Altmann agreed that London prices “are likely to make the problem for elderly people needing to be looked after in London more acute”.
She said: “The government needs to ensure that there is a proper plan for allocating money in coming years.
"This includes a national scheme that spreads the cost of care across the whole population, so everyone contributes something, rather than placing the entire burden on only those who need care.
"It also requires a system that encourages families to allocate a portion of their assets to cover care costs in later life, so they can be prepared in case the need arises. Having a pot of money for care should be almost as natural in the future as having a pension for retirement."
maria.espadinha@ft.com
