- Almost half shy away from talking about long term care needs as they don’t want to cause stress by talking about the issue
- Yet one in five (17%) expect they will have to sell their home to pay for care
- Despite this, more than half of UK adults (55%) won’t start planning for care until after the age of 50 – when it’s likely to be too late to save enough
- Research from St. James’s Place finds most think the state should pay but three quarters (78%) acknowledge that they will be taking the financial strain themselves
Britain is walking into a care communication crisis where families fail to speak up about their long term care needs in misplaced consideration of others, while continuing not to save enough, according to new research by St. James’s Place Wealth Management (SJP).
With the Government increasing National Insurance levels in part to address the payment of long term care costs and the growing funding gap, social care costs for an aging population have been in the spotlight. However, the SJP research shows many people are afraid of what they consider awkward conversations, raising the issue of how care is provided and how those costs will be funded, and so don’t address it at all.
Heading towards half of those surveyed (43%) won’t start a conversation about the type of care needed and how it will be paid for as they don’t want to be considered a burden, while 22% don’t want to discuss a loss of independence. Almost two in ten (17%) are nervous of the potential costs so stay silent, while 15% simply consider it no-one else’s business and 13% say it’s too depressing to talk about.
Many are putting off even thinking about long term care costs, with a third (34%) of those aged 35-55 believing they are too young to be considering care options and it can wait. SJP’s research showed that over half (55%) of UK adults don’t want to consider care and care costs in later years until they are over the age of 50, while less than one in five (18%) believe it’s worth considering from the age of 30.
Tony Müdd, Divisional Director for Tax & Technical Support at St. James’s Place and the author of the SJP Social Care Report, comments: “For a large percentage of people there will come a time when they need to consider long term care and, crucially, how they will pay for it. Yet the research shows that having the knowledge that they will have to save considerable amounts to fund care, particularly if they wish to have as many options in future as possible, is not often translating into them taking practical steps to address the issue.
“Many are shying away from both making plans and sharing them with friends and family because they find the subject complex, awkward or depressing, despite acknowledging the likely practicalities and costs of their future needs.”
How to fund it and how much will it cost?
Two in five (40%) have good intentions when it comes to saving for care, saying that they want to put money aside regularly to help cover the costs. However, one in five (19%) acknowledge that realistically they will need to sell their homes to pay the bills for care in later life.
Only a fraction (13%) thought funding for social care should be solely or mainly down to personal contributions, while six in ten (60%) said it should be largely or entirely down to the state to pay. One in five (21%) said it should be split equally. However, in reality three quarters (78%) are bracing themselves to cover this financial burden partly or wholly themselves.
Estimating the annual costs of care, three in ten (30%) thought it would cost £11-20,000, with 23% plumping for £21-40,000. In fact, the true average cost across the UK of living in a residential care home is £704 a week, more than £36,000 a year, while the average weekly cost of a nursing home is £888, or £46,000 a year. There are however large regional variations, with London and Bristol currently offering average nursing home fees of between £1000 and £2000 a week, more than £100,000 a year.
Planning for the future
The preference for those looking to fund care would be a specific savings pot or vehicle like a pension (40%), while only one in five said that they expected to sell their home to pay for care. One in five (20%) said they intended to ask a relative if they could move in with them if they needed care.
There was something of a gender split on the subject of sharing plans for future care, with four in ten (43%) men happy to be upfront but six in ten (57%) preferring to wait, while women were evenly split (48% to 52%) on whether to outline plans now or delay it until later. Perhaps surprisingly, the pandemic has mainly prompted more discussion of care plans for the youngest age group, 18-24, with an even split (48% to 52%) between those who would or wouldn’t discuss it, tailing off through the age groups to 22% of those aged 45-54 and only 13% of those aged 55+ prepared to open a care conversation.
Tony Müdd continues: “In reality, over the next 13 years, those aged 80 and above in the UK will increase from three million to five million, the biggest percentage increase since records began. Many, if not most, may not have access to publicly funded care and will need to make at least a partial contribution to their care, while many more will have to meet their costs in full, which may be extremely high.
“It remains the case that the majority will not benefit for public funded care and this will continue to be the norm, despite the proposed introduction of the £86,000 cap. That’s why having access to suitable advice and giving proper consideration to making appropriate provision for future care is so important.”
The St. James’s Place Social Care Report outlines a number of innovations that could help to create a better, more integrated system to tacking social care issues.