Research by Saga predicts that the future average cost of a 4 year stay in a care home is set to double from £112,312 to £223,476 in the next 20 years. This figure is based on today’s cost increased by inflation (2.5%) combined with increasing care home fees (3.5%).
Few people really understand the cost of care, yet it could be the biggest financial burden many of us will ever face, when you consider that the average cost of a house today is £181,810 - which represents just three years care each for a couple.
Figures show that 17% of people aged 85 plus are in long term care. With life expectancy increasing, a male aged 60 today is expected to live for a further 26 years and a female another 29 years on average. This indicates more of us will be likely to require care in the future.
Andrew Goodsell, Chief Executive, Saga Group Ltd says: “Those faced with funding care now will already know the extent of that financial burden, however preparing for the future cost of care is an issue few people want to consider. With the cost of funding care expected to consistently increase above inflation, it’s critical that those already paying for care, or those planning for the future ensure they take advice from a fully qualified adviser.”
Saga believe that many people paying for care are not taking advice from appropriately qualified advisers and could therefore be missing out on state benefits or losing money by not considering the full range of options available. Whilst this may seem a simple oversight, the consequences could be devastating with loved ones facing the trauma of having to be moved from the care home they are settled in when the money runs out.
The Financial Services Authority has stipulated that all financial advisers who provide advice on care funding should have passed the CF8 qualification (Certificate in Financial Planning and Long Term Care Insurance) to demonstrate their knowledge and understanding of the complexities of care funding. Saga’s care funding advisers are all qualified to a minimum of CF8.
Long term care insurance: News update: February 2008