Retirees unwilling to sacrifice their home to cover social care costs

New research sheds light on people’s attitudes towards covering the potential co

As the government prepares to consult the cost of social care, new research from Aegon reveals that most retirees are unwilling to sacrifice their home to cover social care costs. 

The population of the UK is ageing, and people's life expectancies are longer than ever. By 2040, nearly one in four people in the UK will be aged over 65, according to a recent Age UK report. But the country has little money set aside for elderly care, at either the state or individual level.

Many people assume the National Health Service (NHS) can be relied upon to provide care for elderly relatives. But while the NHS can step in under circumstances of urgent need, most families have to fund care costs themselves or rely on cash-strapped councils whose budgets have been cut and who can now only provide the bare minimum. 

Currently, it is estimated that one million older people who need social care in the UK are not getting the support they need.

Ahead of the 2017 General Election, Theresa May was criticised for trying to levy a ‘dementia tax’. The prime minister’s decision came after Conservative party proposals to make people pay more of the costs of social. She then u-turned on the policy by promising a limit on the amount people will have to pay for their care. It is likely that the value of the person’s home will be included when assessing whether the individual had sufficient assets to pay towards their care. 

But Aegon’s research found this may prove unpopular with 61 per cent of those surveyed objecting to the value of the home being included. Objections were highest among older groups, which illustrates the high proportion of home ownership in this group. Almost three quarters (73 per cent) of those above age 65 said they would be reluctant to sacrifice their home. 

Only one in four believe the government should pay all costs, perhaps recognising that this could place an unreasonable burden on future taxpayers. 

As part of the deal on funding care costs, 87 per cent believe there should be an overall limit on how much any individual needs contribute. 

When given a range of options regarding how they were likely to make advance provision for social care costs, two fifths said they would use their pension (43 per cent). One in five (22 per cent) expressed interest a social care insurance policy. The least popular option was a new social care Isa, favoured by 18 per cent.

Steven Cameron, pensions director at Aegon, says: ‘We should celebrate the fact that on average, people in the UK are living longer, but at the same time we need to face up to the growing crisis around how we pay for the increasing number of elderly who’ll need some form of social care.’ 

He adds: ‘Taking people’s house value into account when determining if people have sufficient assets to be paying for care may prove controversial with a clear majority of people unwilling to sacrifice their home.’  

Keep up to date with all the latest personal finance news and investment tips by signing up to our newsletter. Email subscribers will also receive a free print copy of Money Observer magazine.


Subscribe to Money Observer magazine

 

Comments

Post new comment

The content of this field is kept private and will not be shown publicly.
By submitting this form, you accept the Mollom privacy policy.