With councils across Great Britain suggesting that they are providing less funding (-10%) for those needing long-term care, over-55s are more concerned than ever about how they would meet the costs, says a new report ‘Tackling the Care Question’ from the UK’s leading over-55s specialist adviser Key shows.
10% YOY Drop in Number of People Receiving Long Term Care Funding:
Key’s report, the second from the company, asked councils in England, Wales and Scotland via FOI what proportion of those who needed long term care, they paid for in full and what proportion received some financial assistance.
Data collected suggested that there could be as much as a 10% YOY drop in the number of people receiving some form of financial support for care between 2018/17 (568,867) and 2019/20 (512,916). Of the more than 205 bodies that responded, 18% were unable or unwilling to provide the requested data.
Over-55s More Worried than Ever:
Against this backdrop, consumer research found that over a third (35%) of over-55s are more worried than before about how to meet the cost of care in the future – a significant rise compared to 12 months ago when just a fifth (21%)2 were concerned.
Key’s report shows just one in five (20%) over-55s have made some financial provision to pay for care if they need it. Even fewer people can pay for care without worrying – just six percent estimate they are wealthy enough to fund their own care, half the proportion compared to a year ago (13%).
Will Hale, CEO at Key, said: “Today’s figures suggest that between 2017/18 and 2018/19, we have seen a 10% fall in the number of people who councils are providing full or partial care funding for but this may only be part of the picture. Indeed, we know that councils are working hard to support local residents who need care but are facing tough financial challenges and may need to make difficult choices.
”At the same time as councils are under pressure, over-55s are waking up to the reality that they may well need to pay for all or some of their care in later life. This has created the perfect storm and it is vital that the Government focuses on setting out clear plans for reaching a cross-party consensus on social care, and consider long-term reform and funding of the care system.
Funding squeeze turns spotlight on property
Around a third (29%) of over-55s now plan to use their homes to help them pay for care in the future (+10% from 19% in 2019). A combination of low interest rates and continuing stock market volatility has reduced the focus on other ways of funding care. Around a third (34%) of over-55s plan to use their savings and investments compared with 44% a year ago. Also popular is using pension income, which three in 10 (30%) plan to do, although this has likewise fallen in popularity in the last 12 months (from 40%).
However, a quarter of people either don’t know how they would meet their care costs (15%) or wouldn’t be able to meet the costs (10%). One in 12 (8%) would have to sell any valuables they have to fund their care in 2020 – up three percentage points compared to 2019 (5%).
Percentage of people who would use different means to fund their care
|MEANS OF MEETING THE COST OF CARE||Percentage of people planning to do this in 2020||Percentage of people who planned to do this in 2019||Change – percentage points|
|savings and investments||34%||44%||-10|
|some / all the value of my home||29%||19%||+10|
|sell any valuable items I have||8%||5%||+3|
|look to my family for support||5%||2%||+3|
|Council would need to pay||12%||8%||+4|
|Unable to meet costs||10%||5%||+5|
Will Hale, CEO at Key, said: “When you speak to people, you find that the vast majority are keen to receive care and support in the comfort of their own home but struggle to decide how they can meet these costs. With the recent economic turmoil, confidence in savings and pension income has fallen while more people are looking to the value tied up in bricks and mortar to finance care. Getting good advice and understanding what resources you have to draw on is important – and making sure you factor these potential costs into your retirement planning is vital.”
Across the country, the amount funding by local councils varies. Local authorities in London are the most likely to say they provide full funding, with 52% of applicants fully funded, while in Scotland and the North West, 13% and 20% respectively are fully funded. In some areas the percentage who are fully funded increased, such as in the North East where the percentage increased from 13% to 21% and Wales where it rose from 16% to 29%.
Regional breakdown of care funding
|REGION||NUMBERS FULLY FUNDED 2018/19||NUMBERS FULLY FUNDED 2019/20||PERCENTAGE FULLY FUNDED 2018/19||PERCENTAGE FULLY FUNDED 2019/20|
|East of England||29,334||28,499||68%||43%|