Over-55s are more concerned than ever about how they would meet the costs of care, following councils suggesting that funding has dropped by 10%.
This is a new report, entitled Tackling the Care Question, from over-55s adviser Key.
Key’s report asked councils in England, Wales and Scotland via Freedom of Information (FoI) what proportion of those who needed long term care, they paid for in full and what proportion received some financial assistance.
The adviser said the data it collected suggested that there could be as much as a 10% year-on-year drop in the number of people receiving some form of financial support for care between 2018/17 (568,867) and 2019/20 (512,916).
Of the more than 205 bodies that responded, 18% were unable or unwilling to provide the requested data1.
Meanwhile, consumer research found that 35% of over-55s are more worried than before about how to meet the cost of care in the future, compared to 12 months ago when just 21% were concerned.
Key’s report indicates that only 20% of over-55s have made some financial provision to pay for care if they need it. Only 6% estimate they are wealthy enough to fund their own care, half the proportion compared to a year ago (13%).
Will Hale, CEO at Key, said: “Today’s figures suggest that between 2017/18 and 2018/19, we have seen a 10% fall in the number of people who councils are providing full or partial care funding for but this may only be part of the picture. Indeed, we know that councils are working hard to support local residents who need care but are facing tough financial challenges and may need to make difficult choices.
“At the same time as councils are under pressure, over-55s are waking up to the reality that they may well need to pay for all or some of their care in later life. This has created the perfect storm and it is vital that the government focuses on setting out clear plans for reaching a cross-party consensus on social care, and consider long-term reform and funding of the care system.”
29% of over-55s now plan to use their homes to help them pay for care in the future (+10% from 19% in 2019). A combination of low interest rates and continuing stock market volatility has reduced the focus on other ways of funding care. 34% of over-55s plan to use their savings and investments compared with 44% a year ago.
Also popular is using pension income, which 30% plan to do, although this has likewise fallen in popularity in the last 12 months (from 40%).
However, a quarter of people either don’t know how they would meet their care costs (15%) or wouldn’t be able to meet the costs (10%). 8% would have to sell any valuables they have to fund their care in 2020 – up three percentage points compared to 2019 (5%).
Hale added: “When you speak to people, you find that the vast majority are keen to receive care and support in the comfort of their own home but struggle to decide how they can meet these costs. With the recent economic turmoil, confidence in savings and pension income has fallen while more people are looking to the value tied up in bricks and mortar to finance care.
“Getting good advice and understanding what resources you have to draw on is important – and making sure you factor these potential costs into your retirement planning is vital.”
Jacqueline Berry, founder of My Care Consultant (MCC), added: “Today’s report shines a spotlight on what many of us in the care industry know all too well and deal with on a daily basis. Too few people consider how they will pay for care and when they do reach a stage in life when they need additional support, they look for local government help and are often disappointed as they are not eligible due to their finances or because they only need relatively low level support. They then find themselves older, in need of support to maintain their independence and worrying about how to afford this from their retirement income.
“Sadly for many, this doesn’t add up and while many people would prefer to remain in their own homes as they age, this is not always feasible. Getting specialist advice before the need becomes acute and with sufficient time to plan is vital as that means that all avenues can be investigated and there is a higher chance that the older person can retain the type of independence they want.
“Social care provision and funding has long been in crisis but the Covid-19 pandemic has undoubtedly put a spotlight on the urgent need for a complete system overhaul. No government wants to take this on, but at least it looks like there may be some possibility of the funding of social care being brought back onto the agenda.
“Irrespective of what transpires from a political perspective, it is safe to say that the need for accurate and reliable ‘care’ and ‘paying for care’ advice has never been greater for those that need care now, and their families.”