As people live longer, more will need care either at home or in residential accommodation. The costs can be huge.
Help the Aged point out that people do not like to think they will need long-term care. But once you reach the age of 65, there is a one in four chance that is exactly what you will need.
It can cost around £25,000 a year to fund a place in a residential care home. In some parts of the country – most notably London – where property prices are high and available beds thin on the ground, the bill can be over £30,000 a year. And add any costs for creature comforts that the new resident might request.
12 million people are not even saving enough for a comfortable retirement, so expenses on this scale will be beyond them unless they sell their property or any other asset they may have wished to pass down to their family.
State help is limited, with local authority contributions being strictly means-tested. If you have assets worth over £22,250 and live in England or Northern Ireland, you will receive no help with care costs apart from an attendance allowance for care received in your own property or residential accommodation, or a registered nursing care contribution if you're living in a nursing home.
In Scotland, The Scottish Executive pays for personal care, but people still face considerable expense. The system does not pay the basic accommodation costs or for food. These account for a large proportion of care home fees.
The tactic of giving away assets, such as property, in order to beat the means test, is playing a dangerous game. Under "deliberate deprivation" rules, local authorities are entitled to order the gifted asset to be returned to the estate of the individual who is claiming help with care home costs. Crucially, there is no time limit on the local authority's power to do this.
Few of us think so far ahead as to what we will do if we need long-term care.
Long term care insurance: News update: September 2008