Posted on 27/06/2018 by
Many are also worried about the fate of the NHS, particularly younger people, who fear it will no longer be there for them when they are older.
Social care funding was a key issue in last year’s general election with the Conservative Party’s “dementia tax” costing them votes, and now Cabinet ministers have delayed the long-awaited Green Paper yet again.
New research from retirement specialists Just Group shows the over 45s are now more prepared than the Government to take tough choices on social care.
Public confidence is seeping away with less than a third of over 45s expecting the state to pay for their social care, down from more than half just six years ago.
By far the biggest problem is people don’t know how the system works or what their financial responsibilities are
Stephen Lowe, group communications director at Just Group
Stephen Lowe , group communications director at Just Group, said the number of people over 80 will almost double in the next 20 years and people desperately need clear direction.
“By far the biggest problem is people don’t know how the system works or what their financial responsibilities are, so they need the Government to stop delaying these decisions,” he said.
One in three said they would consider selling their homes, while a similar proportion would raid their savings. Others would rely on their pension and other retirement income to cover care costs, while one in five had no idea how they would pay.
Lowe said high levels of pensioner home ownership could pump billions of equity into the care sector: “People are receptive to using property wealth at least up to a limit, with the State stepping in after that.”
Where someone has a home worth £500,000 nearly seven in 10 thought care costs should be reclaimed from the house sale after death.
A third of people say they would consider selling their home to pay for care
People are also fearful about the NHS, with a third thinking it will no longer be free at the point of care when they reach age 70.
Younger people are most pessimistic, with almost half of 18-34 year olds expressing doubts, according to new research from insurer Aegon.
With one in four fearing the state pension will not be there either, Aegon pensions director Steven Cameron said: “Younger generations in particular accept there is a very real possibility that the state won’t provide for them.”
Higher life expectancies mean that everyone must have a robust financial plan for their health in old age, Cameron added.
Charles Calkin, a financial planner at James Hambro & Co, said many will have to reassess their financial plans: “The priority has always been to pay off your mortgage and fund a comfortable retirement.
“Increasingly, we also have to think about funding later life care too, which may include dementia care.” Homes will be a key source of funding but can pose problems.
Calkin said: “What if a spouse or partner is still living in the home? Downsizing can free up capital but is not without costs and needs to be thought about early.”
He added equity release also poses challenges: “We can’t assume interest rates will stay this low and equity release will get more expensive when they increase, so we have to make sure the model is future proof.”
He encourages his clients to budget for three years of care: “Dementia sufferers can survive for much longer and this is where the Government must still step in, supporting those whose needs are much greater than average.”
Figures from consumer group Which? show that residential care costs vary massively between regions, ranging from £34,632 a year in the North-east to £54,132 in the South-east but Calkin said: “I have clients paying £90,000 to £120,000 a year.”