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20 Sep 2017

Four in five expect to need residential social care

Four in five people expect to need residential social care in their old age, and they have a good idea about how much that would cost, according to new research from Aegon.

Most people also have realistic expectations in terms of how long older people typically spend in residential care, Care Home Management reports. In the Aegon survey, 80% thought the average length of time needing care is over three years, while 30% said the average is more than five years.

Steven Cameron, pensions director at Aegon UK, commented: “It is particularly noteworthy that only one in five people said they do not think they will need residential social care in their old age.

“This means most people need to be asking themselves how they will pay for it. The state will not pick up the full tab and failing to plan ahead could have serious implications for inheritance aspirations.”

Asked how much they would need to set aside for residential care, 78% of those surveyed thought the average cost is £30,000 or more a year, with most (59%) expecting it to be between £30,000 and £50,000 a year.

“This understanding of cost is a good first step when it comes to planning for retirement and factoring in the years of care that might be required in late life,” Cameron said.

“The second step is for this understanding and awareness to be converted into action.”

Noting that the Government is likely to put in place new rules on what individuals will be expected to pay towards their care, Cameron said: “This is an area we will be following closely as the sums of money involved are significant and individuals will want to understand their savings options.

“As the debate about care costs evolves, getting professional financial advice may help to ensure people are well placed to meet any future costs.”

Copyright © M2 Bespoke 2017

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