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People do not have a clue how much long term care costs

Most people over 55 do not know that long term care can cost around £26,000 a year, while just 2% have insurance, according to Aviva.

People do not have a clue how much long term care costs

Despite being, ‘worried, concerned or terrified’ about paying for long term care, just 2% of over 55s have insurance and most have absolutely no realistic idea of how much it costs.

Many take the view that £3,610 is a fair price for a lifetime of care – when the actual cost is closer to £26,000 a year. A huge 70% of people meanwhile, according to Aviva’s latest real retirement report, do not even think they should be the one to cover the cost.

Not paying is just unrealistic

The reality is that on average, around one in three women and one in five men aged 65 are expected to enter a care home. From then the risk of entering residential care only increases with age.

Currently the average care home costs £26,000 a year and the average stay is two years – though a significant proportion stay for more than four years and many care homes are substantially more expensive.

According to Aviva, the majority of over 55s would prefer not to pay for care – no surprise there – but concede that it is unlikely that the state can afford to pay for everyone’s care in old age.

Clive Bolton, ‘at retirement' director at Aviva, said with a rapidly ageing population, over-55s realise that they are likely to have to make some sort of contribution to the overall cost of their care.

‘What form this contribution will take is not clear but with just 2% of over-55s claiming to have long-term care insurance, the likelihood is that they will need to look to other assets such as savings, investments or housing equity,’ he added.

The most popular funding options were for the ‘better off' to contribute to the cost of their own care but for the government to pick up the tab for everyone else (51%), or for those who can afford it, to contribute to the cost of care (36%). The majority, some 53% meanwhile felt there should be a cap on how much an individual can be forced to pay towards their own care.

Reform is too costly

This latter suggestion was one of the proposals recommended by the recent Dilnot Commission report on long term care, published in July. It advocated a cap on costs at around £35,000 to £50,000 and an upper limit on ‘hotel costs’ for food and accommodation at between £7,000 and £10,000 a year. Dilnot also recommended that only those with assets, including property, worth over £100,000 should pay for the full cost of care.

Most experts believe that because of the relatively high costs of implementing the Dilnot proposals, the report will be kicked into the long grass and reform postponed once again. The Commission estimates that the recommended changes to the funding system would cost between £1.3billion for a cap of £50,000 and £2.2billion for a £25,000 cap.

A similar report from the Chartered Insurance Institute (CII) also highlights the level of ignorance of the real costs of long term care.

David Thomson, director of policy and public affairs at the CII, said, ‘there is clearly a massive disconnect between public perception and reality. Some 80% of the public have no idea of how much their long-term care will cost and consequently are unlikely to be making any provision to meet that cost’. 

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17 comments so far. Why not have your say?

Anonymous 1 needed this 'off the record'

Sep 21, 2011 at 17:10

Yet we still have Labour and Liberals complaining about restricting housing benefit to £26,000 NET of tax.

These politicians seem to think it is morally right to give fit and healthy people thousands by the Government yet that same politicians and Government are happy rip the guts out of the elderly's savings.

Best financial advice is to spend the lot while you can and let the Government and everyone elses taxes pick up the bill.

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Sep 21, 2011 at 18:24

What is the point of this article? When most people don't have a pension pot equivalent to one years care what on earth do you expect?

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White Stick follower

Sep 21, 2011 at 18:55

The care cost 'average' is totally unrealistic in the Home Counties, where decent levels cost+/- £1,000 per week. Even very basic and low grade accomodation is at least £600 a week. I realise that average is exactly that, but that means that there are some incredibly low charges in some parts of the country. Perhaps they included Scotland, which would, of course, bring the figures down assuming they are drawn from the prices that people personally pay, rather than the cost.

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Pat Murphy

Sep 21, 2011 at 19:14

Scaremongering at its best!

Report says "The reality is that on average, around one in three women and one in five men aged 65 are expected to enter a care home"

So the vast majority viz. 2 out of 3 women and 4 out of 5 menn are NOT expected to enter a care home!!

A powder puff of a story dreamt up by an insurance company trying to flog worthless policies.

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P Williams

Sep 21, 2011 at 19:53

No its not scarmongering or propoganda peddled by some insurance company if you have had to sell your fathers home to pay for his care costs because he happens to be worth over £26,000.

Its evil that somene who has worked all his live - in the private sector so no generous pension - has to sell their home to pay for care when folk in the same care home who have lived off the state and saved nothing get it all paid for.

Politicians need to wake up as this is a real problem and none of them have the guts to do anything about it.

Sell your property and blow your capital /inheritance is 'the peoples policy' then we are all the same.

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pam buchanan

Sep 21, 2011 at 20:41

As a person caught up in this whole mess - be warned it is not just the elderly who require residential care who have to pay. Those elderly who should be getting all funding from the NHS (including accommodation) are wrongly classified by the PCT's as "mainly social needs" to deliberately avoid paying for them using a tool that is so craftily worded that only an extremely minute percentage ever get through the hurdles. My father in law died from end stage COPD, was doubly incontinent, immobile, disease related malnutrition (av weight 6 stone), Atrial Fibrillation etc. etc. He was classed as "mainly social needs" by his PCT. His accommodation alone for 3 years stay comes to over £60,000K. Where does the average working class man or woman have the funds to pay for this? Oh yes, you who are misfortunate enough to have worked all your life, paid your taxes, provided a home for yourself and your family. And not only that you will have the added comfort of knowing you are subsiding those who didnt!. Lots of old people become frail and develop disease - it is not just a small minority, Be warned if you are elderly or have an elderly relative.

For further information:

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steven fieldfare

Sep 21, 2011 at 22:30

Agree with white stick follower. 26K is bottom of the market stuff and 50K per year is a better planning assumption, especially in the South.

Also, many elderly homeowners do not realise (to add insult to injury) that they have been paying through Council Tax for the 40-50% who pay nothing, in the years before their own forced home sale.

Further, they are overcharged by care homes to redress the lesser contract prices payed by Councils. "Average" prices presumably reflect distortion caused by Councils' use of Tesco style purchasing power and therefore are unrelated to cost to self funders.

With present price escalation in care homes, alternative care on cruise liners may soon be a competitive option!!

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colin macdermott

Sep 22, 2011 at 10:16

Well Mr Fieldfare, you do have a point, I have paid £3000+ per 4wks for my mothers care with a nursing care allowence and attendance allowence added on giving a yearly cost of £40thou+ ,I now realise that when i was involved with Rehab of long term mental patients i could have got a better deal with a coach company all the year round and they would have had the pleasure of scenery change daily not stuck in a room/house all day never mind the diet improvement.

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Sep 22, 2011 at 10:39

Don’t forget that trusts offer a way to mitigate net worth for assessment purposes.

My wife and I have setup will trusts so that if one of us dies without requiring care, half of the estate passes into trust and cannot be included in the assessment of the surviving partner.

An inheritance from my parents was put into a trust using a deed of variation to their wills and the first resolution of the trustees was to loan to us, without interest, the entire sum, repayable on demand. This cannot now be included in a local authority assessment.

The trustees can use the trusts to enhance the care of either of us, rather than have it slowly drained away paying for something that others get for free.

This fits with my philosophy of paying what I can, based on what I have earned through my lifetime but for those who really want to avoid paying anything there is a ‘Family Protection Trust’ where almost all assets can be placed outside of individual ownership.

An interesting game – I spent the first part of my life trying to maximise my total wealth and now I’m trying to minimise it!

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Stephen Squires

Sep 22, 2011 at 12:21

This article demonstrates a total ignorance of long term 'continuing care' provision which is the statutory right of every resident British citizen under the 1946 National Health Service act and must be provided 'Free at the point of need regardless of the ability to pay' . The NHS conspire with social services to unlawfully 'shunt' care costs on to patients themselves in order to save the NHS money. There are though numerous cases where the courts have upheld the right to 'free' NHS care - particularly the 'Coughlan' judgement where the Appeal Court ruled that ALL Miss. Coughlan's care, including ALL so-called 'social care' was the sole responsibility of the NHS.Visit and contact the 'nhsContinuing care campaign. Steve.

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Anonymous 2 needed this 'off the record'

Sep 22, 2011 at 13:00

And just how good are those insurance policies when the chips are down I wonder?

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Sep 22, 2011 at 13:50


Who are the Trustees, yourselves for each other, or children?

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LTC Specialist in USA

Sep 22, 2011 at 14:32

My wife is English and I have often wondered how Long term Care is handled in the UK and if their is a viable market for sales? The product in the US also has a very small percentage of people buying that will need it like you describe in the UK . Any info on this would be much appreciated.

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Stephen Squires

Sep 22, 2011 at 15:12

NHS care is NOT free! Every citizen pays for it through a lifetime of punitive taxation. But when they need it, usually in their old age they are unlawfully made to pay again through the confiscation of all their worldly assets! If they own any property they are (unlawfully) deemed to be a 'self-funder' and everyone from the government, down to solicitors, financial advisers, insurance companies, courts and care home proprietors, descend upon them like a plague of locusts, intent on stripping away a lifetime of thrift and care, thus ensuring that their children are left with nothing. Slick US salesmen selling 'financial products' are not welcome! The system can be beaten though - and those who take the trouble can discover how!

This is a total - deliberate - shambles and 'nhsCCC' is planning to mount a 'class action' to force the government to compel the NHS and social services to obey the law - which surely is not a lot to ask! Steve.

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Sep 22, 2011 at 16:37


my wife and a niece are my trustees (we have no children), my wife's trustees are me and her niece.

Of course 'trust' is the important word in all this!

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Sep 22, 2011 at 23:34

Thank you Boris. I was just trying to understand the mechanics.

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Anonymous 3 needed this 'off the record'

Sep 23, 2011 at 04:03

Care home for me - not if I get my way.

Maybe get a nice SE Asian girl to come over and look after me in my own house, at least until or if my needs change and 24 hour medical care is needed... or a one way ticket to Geneva, lol

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