Cost of care homes is increasing ten times faster than the average elderly person’s income, according to a recent study.
One of the nation’s largest care agencies has found that typical fees for pensioners living in care homes is in the region of £30,000 each year. This amounts to an increase of over 5% (around £1,500) in just 12 months.
Residents are now struggling to pay for care, as incomes have only seen a 1% (around £150) boost in during the same period. Pensioners are now finding themselves having to rely on savings incomes, and with the reduced interest rates this is leading to a “desperate and worsening” care crisis.
Since 2012, the gap between incomes and the cost of care has gone up by more than 9%. Though the average pensioner income has increased from £14,195 to £14,456 in the last 4 years, care costs have inflated hugely, from an average of £27,404 to £30,926 annually.
Pensioners are now turning to savings and investments such as equity release to cover the average £290 weekly shortfall and even the wealthiest who earn around £19,800 are still unable to reach the mounting cost levels.
A Director from the care agency who published the study has urged people to plan for care funding in advance, meaning professional advice from wills, probate and estate planning professionals such as yourself is more crucial than ever.
Former pensions minister, Ros Altman blames the Government for failings in looking into the ongoing issues. More older people means more need for care and as this has not been accounted for financially, families are having to take up the responsibility of paying for care.
Are your clients facing similar financial struggles? What advice would you give to pensioners and families who are planning for the future, or are now having to cover mounting costs?
