Social careJun 2 2020

Quarter of savers worried about Covid impact on care funding

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Quarter of savers worried about Covid impact on care funding
ByAmy Austin

Savers are holding back on financially supporting their children due to concerns they will have to fund care for their parents as the coronavirus crisis continues to stretch resources.

Research from advice network Openwork, published today (June 2), found one in four (28 per cent) savers aged 45-plus thought they would not be able to help their children save for a house as the funds would have to go towards paying care home costs for their parents.

This rose to 42 per cent among those aged 45 to 55. At the same time, 70 per cent of the 1,151 people questioned were concerned about how they would fund their own care in the future.

The research found there was a demand for advice on care funding options, with nearly a quarter (23 per cent) saying they would value advice on how to both support families in care while also being able to fund their own care in the future.

Meanwhile, 73 per cent were worried about their retirement income lasting, saying they would choose to not gift money to other family members in case their own funds ran out.

Mike Morrow, wealth and platform director at Openwork, said the coronavirus crisis had highlighted the issues faced by government in ensuring everyone has access to care and how important funding to the sector is.

Costs of residential care can be as much as £55,000 a year if nursing care is needed while care at home can cost £14,000 a year, with families in England needing to make contributions if they have assets of more than £23,250.

Mr Morrow said: “The coronavirus crisis has highlighted the pressure the care sector is under across the country and how much people rely on the staff working in it.

“Of course funding care in old age has been a major issue for years and one which governments have grappled with but not been able to address, which means families and individuals have to bear the brunt once NHS and local authority funding is taken into account."

He added: “Many families are already having to cope with the need to look after their own parents while trying to help out their children who may need support with university and trying to buy a house.

“The issue highlights the value of financial advice in finding ways to balance the needs of different generations while helping clients to plan for their own retirement. Families understandably want to help each other but that support needs to be channelled.”

Think tank the Policy Exchange in April called for social care to be "free at the point of use" so that more people could afford this service.