Older people's savings failing to cover rising care costs

The average older person’s savings are failing to cover the rising care costs, with most people only having enough stored away to pay for just six months in a residential home.

Prestige Nursing+Care is urging people to be more “cost-savvy” as it reveals that the price of a room in a care home is more than double the average pensioner income, representing a yearly shortfall of £14,568. The agency estimates that older people need an extra £247 per week to afford residential care, which has risen from £27,404 a year to £28,637 since 2012.

The research also found that care costs in London, the South West and the East of England to be over £30,000 for a second consecutive year.

Commenting on the “worrying” findings, Jonathan Bruce, managing director of Prestige Nursing+Care, said: “As the cost of care continues to outpace pensioner income, pensioners’ shrinking saving pots are contributing to the worrying financial conundrum of how later life care can be funded. In trying economic times, relying on family members to foot the bill isn’t always a viable option, while the Government’s purse strings are tighter than ever with £11.5b of spending cuts planned. While the Government’s proposed care cap will help some older people, they will still have to incur a significant financial outlay to reach the cap.

“Homecare is a more cost-effective option than residential care, and can be appropriate for all but the most severe levels of care need. Even this though can still amount to a considerable bill over the years. We need to ensure the population are care cost-savvy so better financial planning can take place earlier on in life. The key to this greater provision of information and greater understanding.”

Simon Bottery, director of policy at Independent Age, added: “Care choice should be based on need not costs so it’s essential that people get good advice about their rights to state-funded care and their financial options if they are self-funding. This becomes even more important as care bills rise and will further increase as the proposed ‘cap’ on care bills in introduced in 2016, because the proposed system is complicated and far from comprehensive. “It’s also vital that people understand the benefits of different types of care - care at home, supported housing and residential care - so they can choose the one that best fits their needs and aspirations.“