The colossal cost of care in Britain has left two-thirds of homeowners over 50 worried about how they will pay their way in later life.
In a damning indictment of the spiralling costs faced by many, nearly half of people aged over 50 with their own home think they will have to sell their property in order to be able to pay for their own care.
Over 50s in the West Midlands and the North East of England are most concerned about the prospect of having to sell their home to pay for care in later life, while Londoners are the least worried, Nationwide’s latest research suggests.
The cost of residential care has risen to around £33,000 a year and in the last 20 years, over 330,000 people have had to sell their home to ensure they can keep up with the payments.
Worrying: Nearly half of homeowners over 50 think they may to sell their home to pay for care
In July, economist Sir Andrew Dilnot called on Prime Minister Boris Johnson to channel his hero Winston Churchill by bringing in a lifetime cap of £45,000 on the care bills that people have to pay.
The Tories pledged to implement a cap in the 2015 election, but have since gone back on their word.
On 24 July last year, when Johnson became Prime Minister, he said: ‘My job is to protect you or your parents or grandparents from the fear of having to sell your home to pay for the costs of care.
‘So I am announcing now – on the steps of Downing Street – that we will fix the crisis in social care once and for all with a clear plan we have prepared to give every older person the dignity and security they deserve.’
Social care is means-tested, which means only the poorest get state help towards their costs. Currently anyone with assets of over £23,250 has to pay the full cost of their care.
The coronavirus crisis has highlighted the strains being endured by the care system and those needing its services.
Only 2 per cent of over 2,000 homeowners over 50 surveyed by Nationwide said they would choose to move into a care home in later life.
Nearly a quarter said they would prefer to move into a bungalow to avoid the need to go upstairs if it meant they could continue living independently for longer, and not go into a care home.
Over half said they would prefer to continue living alone with external help from a daily carer that lives elsewhere, while a further 23 per cent claimed they would prefer to continue living alone, but with a family member close by for help.
Meanwhile, over 80 per cent of homeowners over 50 believe they will have to dip into their savings to pay for any ‘age-proofing renovations’ such as walk-in baths or stair-lifts, Nationwide said. But, only a fifth think these renovations would boost the value of their home.
Regional variations: Care cost concerns among over 50s by region
Jason Hurwood, Nationwide’s director of home propositions, said: ‘As life expectancy has steadily increased, so too has the challenge of funding later life care for many.’
He added: ‘If someone is looking to raise additional funding to pay for care, there are a number of options.
‘One is to downsize or move to a cheaper area; alternatively, you could make changes to your current home that can support you as you grow older.
‘Depending on your individual circumstances, releasing equity in your home is another option that many choose.
‘However, this is a major financial decision and we’d always strongly recommend seeking independent financial advice to understand all of your options before progressing.’
Worries over care costs vary by region up and down the country, according to Nationwide’s latest findings.
Over 50s in the West Midlands, the North East and Yorkshire and the Humber are the most concerned about future care costs, with those in London, Scotland the South West of England are less concerned.
However, it should be noted that even at the lower end of the spectrum, at least 60 per cent of more have concerns over care costs.
Speaking to This is Money, Colin Angel, policy director at United Kingdom Homecare Association, said: ‘Few people plan for the cost of social care, because the balance of responsibility between the individual and the State is not understood. There are few incentives or financial products to encourage people to do so.
‘The Government must make a decision on how to fund care in the future, considering the needs of people who do not have property assets and those who do.
‘How to do this fairly is a political question, but tax relief would help people pay for their own care and changing the VAT status of essential welfare services from ‘exempt’ to ‘zero rated’ would enable social care providers to reclaim the VAT they pay on goods and services, with a minimal loss of revenue to the Treasury, enabling savings to be passed on to people who buy their own care.’
Anyone worried about potentially having to sell their home to pay for care costs should get proper financial advice before making any such major financial decisions.
The Age UK charity also has a helpline at 0800 055 6112 where people can get advice if they are concerned about future care costs and want to know what their options are.
Time to act: Prime Minister Boris Johnson has been urged to act on care costs urgently