Millions at risk of not planning sufficiently for care
Millions of people are underestimating the cost of paying for a care home place – potentially putting some at risk of financial problems or struggling to get good quality care in later life, according to research from consumer champions Which?
When asked to estimate the cost of a private nursing home place in their region, more than half (55%) of respondents came up with a figure that fell short of the average cost.
£12,000 per year shortfall
On average, people underestimated the true cost of a care home place in England by £237 per week – the equivalent of £12,000 a year.
Worryingly, one in 10 people underestimated the true cost by more than £757 per week – the equivalent of £39,000 a year.
Three in 10 people admitted they simply did not know the weekly cost of a nursing home in their region, while only one in seven (15%) got the answer right or overestimated the cost.
The need for care
There are more than 400,000 people in the UK living in residential and nursing care homes. Of these, almost half pay for care themselves and the rest are paid for, either wholly or partly, by their local authority or the NHS.
Around one in 10 older people with care needs now face care bills of more than £100,000 – and previous Which? research has shown that only one in 10 adults aged 55 or over say they’ve put aside money to pay for care needs as they get older.
This highlights a real need for proper retirement planning with full cash flow forecasting, to illustrate to people how they could best afford to fund care needs in later life. Whilst this is something we do as a matter of course for our clients, most financial advisers still omit this comprehensive approach from their service.
New tools from Which? to help you plan
Which? has launched a simple online cost of care and eligibility tool, to help families get information about the likely cost of care in their local authority area in England. It includes a unique calculator that enables people to find out how long their money might last for and advice on what happens if it runs out.
The new Later Life Care website includes a care services directory with a range of new features, including food hygiene ratings for all care homes and Care Inspectorate inspection ratings for Scottish providers.
The new Which? website now only directs consumers to advisers who hold the SOLLA Later Life Adviser Accreditation, which I have held for a sometime. This reflects Which?’s belief that advisers who have voluntarily undergone a robust assessment of their skills and experience in advising later life clients are best placed to help when it comes to care planning.