Care costs 'cutting inheritances'
Published on 04 September 2013 12:00 PM
Millions of Britons are being warned not to rely on an inheritance to pay for their own retirement. According to a new study, one in seven hope to fund their retirement by inheriting money or property.
The survey by finance firm NFU Mutual, found that most people don't realise their legacies will be reduced by the cost of caring for their parents, with more than half of UK councils having cut spending on residential care for older people over the past four years.
NFU Mutual's Sean McCann said rather than waiting for a parental legacy that could be 'whittled away' by inheritance tax and care costs, people should be making their own retirement plans.
It was found that more than a million homes have been sold to fund care costs over the last five years, while over two million older people have had to use their savings.
The current system in England means people with assets - including property - worth over £23,500 get no financial help if they have to go into a care home, where the average cost of a room is more than £28,000 a year.
Too many older people face an uncertain future
Reforms of the social care system going through Parliament will cap the amount people should have to pay for care at £72,000 but it is estimated only one in eight older people will ever qualify.
Michelle Mitchell, Charity Director General at Age UK said: 'Selling homes to pay for care costs is just one of the many problems of our crumbling care system and these figures underline just how deep the problem is.
'There are too many older people who are facing the prospect of an uncertain future and worry that they will lose everything they have worked for. Local authority budgets continue to be stretched, and more and more older people are having to take on an ever greater share of the burden of funding social care, either through being pushed out of the system because of tightened eligibility thresholds or because they are forced to pay more in fees and charges.
'What's worse, there is currently no realistic way to plan for care costs, leaving older people not knowing how much they will pay until they come to the point of need.'
Copyright Press Association 2013