70 per cent of over-55s do not believe they should pay for long-term care
Providing for care in later life, whether for yourself or a relative, can appear a complex issue. Most people with assets over £23,250* will be required to pay for their own care.
Despite government warnings that the current elderly care system is unsustainable, 70 per cent of over-55s don’t believe that they should pay for care in retirement. Of those who do, they state that just £3,610 is a fair cost for a lifetime of care, reveals Aviva’s latest Real Retirement Report.
With the annual cost of a room in a nursing home estimated to be on average £35,984**, how to pay for care can be a major concern for many people.
Long-term care matters
– Just 2 per cent of over-55s have long-term care insurance
– Majority (81 per cent) worried or concerned about meeting care costs
– Almost half (46 per cent) call on the government to set clear care standards
Care conundrum
While the majority of over-55s would prefer not to pay for care, they do concede that it is unlikely that the State will be able to pay for everyone’s care. The most popular funding options were for the “better off” to contribute to the cost of their own care but for the government to pick up the tab for everyone else (51 per cent) or for those who can afford to, to contribute to the cost of care (36 per cent).
How affordability is determined was a matter for debate with some suggesting it should be based on current assets (16 per cent) and others feeling lifetime income (14 per cent) should be the measure. Irrespective of what system was used, the majority (53 per cent) felt there should be a cap on how much an individual was forced to pay towards their own care.
Lack of planning
Despite the fact that under the current system people are expected to finance aspects of their care, the research highlighted a significant lack of preparation. Over half (53 per cent) of over-55s have no plans at all in place to meet these costs and 14 per cent continue to believe that the government will cover all the fees.
Even amongst those who do say they have some plans in place, just 2 per cent have long-term care insurance with others preferring to rely on savings and investments (13 per cent), housing equity (9 per cent), their pension funds (3 per cent) and on family assistance (3 per cent).
However, while some over-55s were happy to use their housing equity to finance care, a clear majority (62 per cent) believe that they should not be forced to sell their house to pay for care. Those aged 65-75 were the most averse to seeing their homes sold to pay for care (68 per cent) – potentially as they have already ear-marked the equity for other costs in retirement.
Significant concerns and confusion
Just 19 per cent of over-55s say they are relaxed with the majority feeling concerned (41 per cent), just over a quarter feel worried (29 per cent) and – even – terrified (12 per cent) about the prospect of meeting long-term care costs. While there were lots of different options as to how care should be funded, one clear message from the research was that the over-55s needed more guidance.
Indeed, almost half (47 per cent) said there needs to be clearer information on the topic, 46 per cent felt the government should set clear universal care standards and 36 per cent would like to see a single government department responsible for all care issues. This move would help to clear up any confusion as 48 per cent of people look to the State in one form or another for advice on this issue – 18 per cent to the government directly, 16 per cent to their local council and 14 per cent to a medical professional.
Rapidly ageing population
The research clearly shows that the majority of over-55s do not believe that they should have to pay for care in retirement. However with a rapidly ageing population, this is simply not possible and over-55s realise that they are likely to have to make some sort of contribution to the overall cost of their care.
* England 2011/2012
** Care of Elderly People UK Market Survey 2010/11 Laing & Buisson
