Shocking cost of care means we’re saving less - not more

Care could cost you more than £90,000 - so why have we stopped saving for it?

Cost of residential care

The cost of care in old age is horrifying. The politicians hope that by letting us in on the sheer scale if the costs, they will persuade us to save enough cash to pay for it. Unfortunately, it's having precisely the opposite effect.

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The cost of care is horrendous. The average room in a care home costs £600 a week - or £726 a week for nursing care. Assuming you need cheaper residential care, that's an average of £31,200 a year. In the South East, the average rises to £37,804 a year. The average length of stay in a home is two and a half years, which in the South East would cost an average of £94,510.

There's no limit to the cost of care either, so if we're lucky to live longer than average after going into care, we can easily spend more than £100,000 of the cash we have spent a lifetime saving.

Put off saving

The sheer scale of this expense is putting people off saving for the future altogether.

A study by Saga Money found that a third of over 50s say if they had to pay care costs down to their last £100,000, they would not save for their future. This is presumably because their reward for careful saving would just to see the lot go on care - while those without savings have the bill covered by the government instead.

Nici Audhlam-Gardiner, managing director of Saga Money commented: "People find it grossly unfair that some people get all costs funded by the state, whilst others are faced with losing a huge part of the estate they have worked hard to build up.

Capped

That's not to say that we don't want to pay a penny for care - many of those in the study agreed that people who have the means should contribute to the cost of their care. However, if they are expected to contribute too much, it's going to stop them from saving. As a result, nine in ten want to see care costs capped.

Audhlam-Gardiner says: "They strongly believe there should be a cap on care fees and that this should be set at around £60,000. If the Government sets the cap too high or the floor too low then people of all ages are saying that this would put them off building wealth for the future."

She adds: "The concept of selling the family home before or after death to pay for care does not sit well with three quarters of people, but it is not just homeowners looking to protect their inheritance that feel this way. A similar number of people in rented accommodation also said that this concept was not right."

"Clearly we need to find a sustainable solution to our care funding crisis, however without a realistic care cap in place, the move risks having the opposite effect, with people choosing to spend now rather than buying their homes or saving for later life - leaving the state to pick up an even bigger bill for the future!"

But what do you think? Would you be happy to pay for care? And would you like to see the cost of care capped? Let us know in the comments.

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