30% of over-60s do not expect to pay for later life care costs, with 41% also never expecting to pay for the care of a loved one, according to new research from Canada Life.
This comes at a time when the number of people requesting later life care is on the rise.
Despite the growing need for care in later-life and the average cost being an estimated £600-800 per week, 27% say they do not know how they will pay for care and 18% have not planned that far ahead yet.
For those who have thought about how they may pay for care, 27% of over-60s say they would use their state pension (down from 37% in 2021), followed by 25% who say cash savings (down from 35% in 2021), and private pension (18%).
Other ways over-60s expect to pay for care include:
- 14% are selling their assets (e.g. house)
- 13% say they expect the government to cover the cost of care
- 9% say they would release equity from their home
- 5% would use an inheritance.
Alice Watson, head of marketing, insurance, Canada Life, said: “Despite recent efforts from government to tackle the care crisis, including the introduction of the social care levy and cap, with people living longer, the harsh reality is that more people will need care – and this must be paid for.
“However, it’s clear there is a lack of understanding and awareness over who is expected to pay for care, just how much it could cost and how to plan for covering any care needs in later life. For example, the lifetime cap of £86,000, doesn’t include all daily living costs, and could be misleading for those who think it includes all costs. It’s likely, therefore, that many individuals will still need to contribute above and beyond the cap.
“This is where advisers have a crucial role to play in helping those in and approaching retirement to plan ahead. The possibility of having to pay for care is now a crucial part of retirement planning. Advisers will be able to help customers navigate the various options available, whether that be using their pension, their property wealth, or a combination of the two, to allow them to plan ahead with certainty.”