Cost of care exceeds average pension

A report has revealed that average person’s pension will fail to meet their care costs.

The research by retirement specialist LV= says spending on care is now £75,000 per person, more than the average pension income.

John Perks, managing director of LV= Retirement Solutions, said: “The UK is facing an uncertain future on the funding of long-term care, especially with the care cap being delayed. Although many of us leave the workplace in good health, as we are living longer with the average retirement now 17 years long, the likelihood of us needing residential or domiciliary care is increasing.

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“In addition, we are also seeing a rise in the length of time being spent in care. This highlights a very real need for many to consider a more flexible retirement income solution such as a fixed term annuity.

“Low interest rates, coupled with social care budgets being cut, create a worrying financial backdrop for many, especially those already in retirement as they are currently faced with an open ended bill which makes it difficult to plan effectively to fund these costs.

“We would encourage those individuals in and approaching retirement, to seek financial advice as to how they can make the most of their pension pots and potentially meet these costs.”

The report says one in five retirees have sold their home to pay for care and a quarter of UK adults with parents in care contribute to the cost of their care.

It adds that more than twice as many women than men require long term care.

The report finds that the number of retirees going into care has increased by 13% from 829 days to 955 days over the past decade, or over two and a half years.

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