Majority not saving for long-term care

Nearly two million people aged 55-75 who have spare money have no plans to allocate any to pay for long-term care, according to research from Fidelity International.

The survey of 1,109 adults aged 55-75 reveals over two thirds (69%) – equivalent to nearly two million people – have no plans to keep money back for long-term care (LTC).

Of the quarter who do plan to set aside money, one in three (37%) will reserve less than £25,000, enough to cover just one full year’s care.

The survey also reveals three quarters (74%) of women and two thirds (66%) of men do not intend to set money aside and, of those who have not yet retired, 68% are not planning to keep back any of their savings in the event of their partner or themselves requiring LTC.

Of those already retired, the figure rises to 70%.

Simon Fraser, president of institutional business at Fidelity International, says the average nursing home stay is three years, but just one in five of the people surveyed will reserve anywhere near enough to pay for it.

This means a significant chunk of people on the cusp of retirement could spend it in both poverty and ill health.

Fraser adds: “If people want enough money to live on in retirement and pay for the things that really count – like spending twilight years in comfort and dignity let alone passing money onto their children – they need to start saving regularly and in a wide basket of savings and investments.”

Average care home fees have increased 51.5% in the last five years to give an average cost of care in 2005/06 of £21,112, but the basic state pension has only risen 21.5% in the same period.

If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Emily Perryman on 020 7968 4554 or email emily.perryman@incisivemedia.com.