The UK's Ageing Population Brings Financial Concerns
A few statistics... the UK has an ageing population, currently 10 million people in the UK are over 65 years old. The latest projections are for 5½ million more elderly people in 20 years time and the number will have nearly doubled to around 19 million by 2050. According to the Laing & Buisson market survey the the average cost in England is £532 a week for a residential care home or £750 for a nursing home. This implies average spending of more than £100,000 in a care home and £150,000 in a nursing home.
Naturally this currently puts or will put a lot of people in pressured situations where the cost of care can spiral.
Some two million elderly people have been forced to dip into their savings to pay for care costs, a survey by a national insurance company has revealed. Research undertaken for the NFU Mutual insurance group shows around a million homes have been sold to cover care costs in the last five years, causing three out of four people whose parents go into care to forego all or most of any financial inheritance from their parents.
The findings suggest more than three quarters (77%) of those whose parents or in-laws had needed residential care had lost out on a significant part of savings that they would otherwise have inherited. Around half claimed their parent’s care bills were met from savings and 28% said the family was forced to sell their parent’s home to pay care costs.
Under current arrangements, anyone with savings of more than £23,250 is forced to pay for their own care. Recent reforms to raise this financial bar to £75,000 - in line with Oxford economist Andrew Dilnot’s recommendations will not take effect until 2016.
Sean McCann, head of life technical and marketing compliance at NFU Mutual, said: ‘Younger generations could be in for a long wait if they are banking on an inheritance to fund their own retirement. ‘People should be making their own retirement plans rather than factoring in property and wealth that could be whittled away by the cost of care.’
One solution to this dilemma is to move elderly relatives into your own home, giving them greater independence, saving on nursing care fees and releasing the equity on their own property into the family. Often, however this can mean cramped conditions but consider building separate living quarters within your property grounds. This may sound elaborate and expensive but a Log Cabin Granny Annex, something New Forest Log Cabins specialise in, can be a very cost-effective solution. How do you go about this and what are the costs involved? Please visit our Granny Annex page for further details.