Fraction of over 55s saving for later life care

Fraction of over 55s saving for later life care

A mere 12 per cent of adults aged 55 or over are putting aside money to pay for their future care needs, according to research from consumer group Which.

The survey, which polled 793 people aged 55 plus in June, showed the majority were prioritising other things in life over planning for care.

The consumer group concluded merely a third (34 per cent) of over-55s had discussed their preferences for care in later life with a friend or relative, while a fifth (19 per cent) said they did not even know where to look for information about care.

But according to the Lord Darzi Review of Health and Care, published in June, one in 10 older people face care costs of more than £100,000 on average.

Which is calling on the government to use is social care green paper, to be published in the autumn, to create a social care system that works for consumers and helps them make positive living choices, before crisis-point, it said.

Several solutions are said to be on the table, such as a ‘Care Isa’ – a capped savings product, exempt from inheritance tax – and a 'care pension', which mixes drawdown and care insurance.

Alex Hayman, Which managing director of public markets, said the "broken social care system cannot continue to fail older people and their families in delivering high-quality, affordable care when they most need support".

He said: "The government must recognise that most people won’t have made extensive plans for their care, so the system must be designed to help people get the support they need at a time of crisis and stress for themselves and their loved ones."

Martin Bamford, chartered financial planner and managing director of Informed Choice, argued that the "cost of care is difficult to plan for in advance but is something we all need to factor into our long-term financial plans".

He said: "For people who do need care and either need or want to self-fund the cost, it can be a significant expense, vastly reducing what is left for inheritances.

"Despite a lack of long-term care insurance products in the UK market right now, clients can plan ahead by putting in place a lasting power of attorney, considering ‘disaster scenarios’ in the form of average care expenses at typical ages, and by talking to friends and family about their care wishes.

"We don’t expect to see anything revolutionary proposed by the government in their green paper this autumn. Adult social care funding became a political hot potato when Theresa May’s dementia tax proposals backfired so spectacularly.

"The current system is in crisis, both in terms of local authority affordability and the devastating impact of costs on families. Reform is badly needed, I just don’t believe the government has the appetite or budget to do what needs doing."

Back in December, the government confirmed the proposed £72,500 cap on social care would be scrapped.