There is an "alarming gap" when it comes to expectation and reality on retirement savings and the cost and duration of later life care, a survey has found.
Quilter Cheviot Investment Management found the majority of UK adults (61 per cent) either do not think their parents will need to spend time in a care home or do not know if they will.
The firm had commissioned a survey of 1,525 UK consumers aged 18+ with a minimum of £100,000 of investable assets and living parents.
When asked about how much a UK care home costs per person, 27 per cent of respondents believed the average cost to be between £1,000 and £2,000 a month; 24 per cent said between £2,000 and £3,000 a month, and 19 per cent estimated it to cost between £3,000 and £4,000 a month.
But according to research from consumer group Which, in 2016/17 the average weekly cost of a room in a residential home in the UK was £606 (£2,424 a month), while a room in a nursing home cost £802 a week (£3,208 a month).
Quilter Cheviot’s poll also found more than a third (39 per cent) of respondents could not estimate how long their parent or family member may need to live in a care home.
Some 28 per cent of UK adults estimated that family members may need to spend between one and three years in a care home. This dropped to 10 per cent for between three and four years and to 6 per cent for between five and six years.
A report by Age UK published earlier this year had found about 27 per cent of people lived in care homes for more than three years.
Pamela Reid, client services director at Quilter Cheviot, said: "Advances in medicine mean we’re living longer and healthier lives, however our health isn’t something we can always control.
"While life expectancy has increased significantly, that doesn’t necessarily equate to a healthy life expectancy. It’s important not to ignore the fact that this could also mean we need assistance later on in life and may have to plan for it."
It is estimated a mere 12 per cent of adults aged 55 or over are currently putting aside money to pay for social care later in life.
Former prime minister David Cameron had promised to implement a cap on the cost of care of £72,500, which was supposed to come into effect in April 2016.
But in 2015 the government pushed this back to 2020, because it would add £6bn to public sector spending at a "time of consolidation".
In December the government confirmed the proposed cap would be scrapped while a green paper on long-term reform was put together.
The publication of this paper was originally expected in the summer but has since been pushed back to the autumn, and the government has since hinted the publication could be delayed further due to "unforeseen circumstances".
maria.espadinha@ft.com
