Awareness of the costs involved in funding care in later life is growing among over-45s but individuals are still not including care in their longer-term financial planning, according to the 5th Care Index from Partnership.
The State will not provide:
Only one in five now (19%) believe the State should use taxpayers money to pick up everyone’s care costs, a sharp fall on 2015 (42%) and 2014 (47%). Instead, over half now agree people should cover their own care costs either by using savings (51%) or by selling their house (51%), the highest level since 2012.
When asked if the state would fund their own care costs, just 16% believed this would happen, a proportion that has fallen every year since 2012 (51%). Among over-75s the number is just 5%.
For the first time since the annual survey began in 2012, more people overestimated than underestimated the cost of a year’s residential care, suggesting a more realistic attitude towards the potentially high costs involved.
Lack of Communication:
Despite nearly four in 10 (38%) over-45s saying they had some experience of looking into care for friends and family, this does not appear to have encouraged them to act when it comes to planning for their own potential care needs.
Nearly eight in 10 (77%) said they have yet to think about care or speak to loved ones about it although three in four (73%) would like to be near family if they did have to enter a residential home. A third (32%) plan to live with children if they need support, but only 4% have spoken to them about the possibility. And despite knowledge of the high costs when paying for care, only a small minority (6%) have included the cost of care in their financial planning.
Stephen Lowe, group communications director at Just Retirement, said: “The research does show that awareness and comprehension is developing about the costs and practicalities of long-term care.
“However, this is not enough and we should not be complacent as there is still significant work to be done by both the industry and Government to maintain and build upon this. This is a move that will ultimately pay dividends in the future if we find that more people are considering how to meet care costs and are using trusted sources of information and advice to make smart, sustainable choices.”
Since launch in 2012, the Care Index has taken the views of more than 10,000 people and has become a respected annual analysis of consumer knowledge and attitudes towards long-term care issues, including the costs of care, who pays if care is required, and what planning people are undertaking in their own lives.
Key Findings from the 5th Care Index include:
- A growing number of people (75% in 2016 compared to 43% in 2012), would prefer to receive care in their home if it was required.
- Almost half (46%) of over-75s said they would be happy to go into residential care compared to 30% of 45-55s.
- People overestimated the annual average cost of residential care at £30,830 compared to the actual cost of £30,496 although 40% said they thought it was less than £25,000.
- 44% of people supported the idea that individuals should pay care costs up to a cap of £72,000 – a provision in the Care Act 2014 that has been delayed to at least 2020.
- Half agreed that they would delay making financial decisions for residential care until after the new funding rules have been introduced.
- More than half (56%) agreed referral by a local council to a financial adviser would be helpful.
“The new measures that have been introduced by the Care Act had the potential to clear up some of the misconceptions about funding care, but that doesn’t seem to have happened with six in 10 still saying they are ‘confused, perhaps as a consequence of key parts such as the cap on care costs being delayed,” said Stephen Lowe.
“Regular news coverage of a care crisis is making people generally aware that big problems exist but lack of detailed knowledge of important rules such as means-testing limits or whether they will need to sell their home is leaving them in limbo when it comes to planning or taking action.”
The results of the Care Index demonstrate the work that still needs to be done to ensure more people achieve the sustainable outcomes they need. Progress must be made on:
- An expansion of the Government public awareness campaign and more prominence of care planning by the government’s Pension Wise service.
- More engagement by local authorities when offering information and advice to support those funding their own care.
- Recognition of the value of professional financial intermediaries in offering care funding advice.
- More communication and discussion within families to end the ‘taboo’ on talking about care issues.
- A higher profile to the importance of Power of Attorney.
- Incentivising consumers – through regulatory and tax changes – to make financial provision for care.