Consumers estimate the average cost of residential elderly care for one person to be £28,358 per year.
However, uSwitch.com analysis shows the cost is now £36,088, a difference of almost £8,000 a year. This also means that the cost of looking after one ageing parent for a year far exceeds the average annual UK salary, currently estimated at £27,271.
Just six years of care for one parent now costs the same as the average cost of raising a child for 21 years – including any university fees.
The research also reveals that families are simply not talking about elderly care. In fact, eight in 10 families have never discussed paying for care and only 12% of over 55s have discussed their own care costs with their children.
People also have differing views on who is going to pay for the care. 76% of millennials expect that their parents will foot the bill, but 30% of those over 55 are unsure about how they are going to afford to pay for their care. 44% of millennials haven’t even thought about caring financially for their parents.
Overall, uSwitch.com found that less than 8% of people feel prepared for the cost of their parents’ elderly care and one in four (25%) are concerned about being responsible for it. A further 23% are burying their heads in the sand and don’t want to even think about the financial challenge ahead, uSwitch said.
The scale of the UK’s elderly care crisis is magnified as Brits are not saving for the future. On average, UK consumers only manage to save £126 a month, with 28% admitting they save nothing. 19% of homeowners say they will sell it to finance their care, rising to 22% among the over 55s.
uSwitch.com is calling on families to start discussing any potential elderly care needs now to help prevent this looming financial crisis before it is too late to do anything about it.
Tom Lyon, spokesperson at uSwitch.com, said: “These findings show how unprepared we are when it comes to funding the care for our elderly parents. It is a sobering thought that it could now cost more to look after an elderly parent than to raise a child, adding extra pressure on families when household budgets are already squeezed.
“Families who do not have their affairs in order and are unable to access government support could be facing a future of crippling debt. With this in mind, it is never too soon to start talking about the cost of care. The sooner you start the conversation, the sooner you can start planning for it.”