Unfortunately the reality is that on average, around one in three women and one in five men aged 65 are expected to enter a care home. From then the risk of entering residential care only increases with age.
Currently the average care home costs £26,000 a year and the average stay is two years, though a significant proportion stay for more than four years and many care homes are substantially more expensive.
According to Aviva latest report, the majority of over 55s would prefer not to pay for care, but concede that it is unlikely that the state can afford to pay for everyone’s care in old age.
If you are over-55s the reality is that you are likely to have to make some sort of contribution to the overall cost of any care, what provisions do you have in place or will you have to rely on your savings, investments or the equity in your home.
A report by the Chartered Insurance Institute showed that some 80% 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.
Under the current system, if you have assets in excess of £23,250 are obliged to sell the family home to fund care costs, unless there is a partner or dependent still living in the family home. They face unlimited bills until their money runs out.
So is it possible for the government to fund long term care for all? Well, the CII report shows the estimated cost to provide the free care at £4 billion and could be covered by raising income tax by 1p.
However it is always going to be a political hot potato for any politician giving such a commitment when the cost is expected to rise sharply over the next few years and further rises in tax may be needed. In the absence of any better sources of funding it therefore seems likely that homeowners will continue to pay for long term care out of housing and other assets unless they make prior provision.
We offer investment opportunities to support long term care needs however we are unable to give Long Term Care Advice.