Less than a quarter of adults over the age of 50 are actively saving for care costs, despite nearly 60 per cent fearing they could lose their savings and homes to fund this, according to research from Independent Age.
The charity found more than half (51 per cent) of homeowners in England over the age of 50 worried about losing their retirement savings and homes to pay for care.
Out of this group of homeowners, women tended to be the most worried about losing their home (62 per cent) compared to men (50 per cent).
More than 143,000 older people, over a third of the 421,000 currently in residential care, are likely to face costs of £100,000 or more to pay for future care.
The government has proposed introducing a cap to prevent rising care costs, but research carried out by Grant Thornton, an accounting firm, for Independent Age found a cap would not benefit the majority of older people in care homes.
If the cap was set too high, most people that are in residential care would not live long enough to reach it with the average stay in a care home being just under two years.
The research showed a £100,000 cap on care costs only affected 5 per cent of people and would only be relevant after eight and a half years in care. A £72,000 cap affected 12 per cent of people and was relevant after six years in care. A cap set at £35,000 was relevant after three years and affected 36 per cent of people.
Claire Turner, director of evidence at Centre for Ageing Better said the costs of social care was evermore present as the population was ageing.
"There are 1.3m ‘sandwich carers’ looking after children while caring for an older relative, many of them struggling financially and unable to stay in work. Too many people find themselves unable to balance caring responsibilities with work," she said.
"In addition to delivering a properly funded and effective social care system, the government should consider legislating for flexible, paid carers’ leave and give carers a Right to Return to the same job."
Independent Age is calling on government to scrap the idea of a cap and introduce free personal care for older people, which Scottish residents have. The charity states that this would “virtually eliminate” high costs.
George McNamara, director of policy and influencing at Independent Age, said: "Catastrophic costs may not be a term used by many older people, but we know that many have an ever-present fear of losing their life savings or homes to pay for their care. The government has a duty and responsibility to act.
"Free personal care, in contrast to the proposed caps, will end the worry of losing everything to fund care. It’s simple, fair and affordable and is the reform that the majority of people want to see."