With the Government Care Act due to start coming into effect in April 2015, Partnership’s Third Care Index [Click here for full report] reveals that consumers are becoming increasingly convinced that they need to be more self-sufficient with property playing a key role.
Over a third (39%) of over-45s believe that those who can sell their homes to pay for care should and just 33% of people expect to rely on State funding if they go into care – the lowest proportion in three years. This is significantly lower than 2012 (51%) when more than half expected to rely on the state.
In addition, almost half (47%) said that the State should not be helping people who could meet this costs from their savings. However, they did recognise that not everyone could afford the average £28,600 annual cost and the vast majority (79%) said that the State should step in and pick up the bill for those who genuinely could not afford it.
When asked how they might fund their own care, property continued to play a significant role with 35% planning to sell their home and 11% suggesting they might rent it out. In addition, people said they would use their pension income (34%), their savings (29%) or income from savings and investments (16%).
Thomas Kenny, Head of Technical Pricing at Partnership comments:
“With a rapidly aging population and an estimated 150,000 entering care each year, taxpayers simply can’t afford to meet these costs for everyone. So it is good news for the country that people are increasingly expecting to meet some of the costs themselves and for others to do the same. This means that the State can focus on helping those who are most vulnerable and in need of state support.
“That said, £28,600 is a large amount of money for anyone to find – especially for those who are on a fixed income as many retirees are. Therefore, the choice to sell their home may well be the best one for their circumstances but we would advise anyone who is facing this choice to get specialist financial advice to help them to make the most of their assets.”
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