Don’t care must consider long term care
Last updated on May 7th, 2020 at 8:54 am
No one seems to care who wins when considering the cost of long term care for the elderly.
The basic problem is most pension savers approaching retirement have no idea how much money they need for long-term care, according to the findings of Chartered Insurance Institute research.
The study, Who cares? in 2010 points out that the average cost of care in a nursing home is around £26,000 a year, while the average stay is two years, adding up to a bill of £52,000 and costs have increased significantly since then.
During that time, the report highlights the average pension is around £10,000 per year, leaving a massive shortfall.
The report concludes:
- 80 per cent of retirement savers have no idea how much long term care costs
- 50 per cent believe care is free at the point of use when nursing care generally is but other care comes at a price.
- An average pension fund will not fund long term care
- Only one in 10 MPs supports the State funding care
The problem is even worse when considered in terms of the current low interest/high inflation saving environment that means savings are not in step with rising costs of living.
David Thomson, CII director of policy and public affairs, said: “There is clearly a massive disconnect between public perception and reality. Most of the public have no idea of how much their long-term care will cost and consequently are unlikely to be making any provision to meet that cost. Even more worrying is that half think long-term care is entirely free at the point of use. The reality is starkly different.
“Our research shows MPs have very little appetite for a model that is fully funded by the state, over half preferring instead a partnership model similar.”
Thomson suggests that financial advisers should point out funding options for long term care to clients.
“This problem needs to be addressed through measures to increase public awareness and by reinforcing public confidence in any new financial services market that might develop,” he said.
For more details from the CII regarding long term care go to https://www.cii.co.uk/learning-index/articles/long-term-care-and-later-life-insurance/6997