Care home costs leave three out of four with no inheritance

The rising cost of care homes in the UK is eating away at many Britons' inheritance, a new report has claimed.

Cost of elderly care eats away at inheritance

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According to a study by the NFU Mutual insurance group, three out of four Brits whose parents have had to go into a care home have lost all or most of their inheritance, with savings and property used to pay for the cost of care for elderly relatives.

The report found that as many as two million elderly people have used their savings to pay for care over the last five years, and an estimated one million homes have been forced to cover the costs over the same period, due to the system whereby anyone with property or savings worth more than £23,250 must pay for their own care.

Nearly one in five of the respondents said a parent or in-law had required residential care, and of those, 77 per cent said their parent's assets had been eaten away by the cost.

Almost 50 per cent said savings had been used to cover the expense, while 28 per cent had sold their parent's home in order to pay the bills.

Though the Government revealed plans earlier this year to bring in a £75,000 cap on the amount at which elderly people would need to pay for their own care, the higher limit is not due to be introduced until 2016, and even then it will not include the estimated £12,000 a year needed for accommodation and food.

Sean McCann from NFU Mutual urged Brits to plan for their own retirement instead of relying on their parents' wealth. He told the Daily Mail: "Younger generations could be in for a long wait if they are banking on an inheritance to fund their own retirement.

"People should be making their own retirement plans rather than factoring in property and wealth that could be whittled away by the cost of care."

Have you lost your inheritance because of the cost of care for a parent or relative? Leave your comments below...