Long–term care costs are set to double by 2050 thanks to an ageing population.
Research from the Organisation for Economic Co–operation and Development (OECD) shows that even those on above–average incomes could spend 60% of their disposable income on care costs.
One in five people will need long–term care of the most expensive kind in the last years of their life, while half will need some sort of care, according to Saga. Yet "no–one has put anything aside for it," says Ros Altmann, Saga's director general.
The government does provide some financial assistance, although its restrictions mean the majority of people are unlikely to receive much state help. Current rules state that anyone with assets (including property) over £23,250 in England, £22,000 in Wales or £22,770 in Scotland will have to pay their own long–term care costs.
"In the UK, with the exception of a couple of cash benefits for the disabled, funding for long term care is really only for the very poor," says Francesca Colombo, senior health analyst for the OECD.
"The big difference between the UK and other OECD countries is that many other countries are now moving towards a universal system.
"It puts the UK closer in situation to the US where long–term care is like a safety net for those who really can't afford anything," says Colombo.
The OECD is calling for more financial assistance from the government but given its stretched resources, individuals will still carry much of the burden. Public spending on care for the elderly accounts for just 0.8% of the UK's gross domestic product (GDP) compared to 3.6% in the Netherlands and 3.5% in Sweden.
What can you do if you don't have provisions for long term care?
Selling your home
Many homeowners face the unenviable choice of selling their home to fund care at home or residential home costs. Legally if you have assets, including your home, above the government thresholds, you're not entitled to hold onto them.
Current rules state that anyone with assets over £23,250 in England, £22,000 in Wales or £22,770 in Scotland will have to pay their own long–term care costs.
If you don't want to sell outright, you could consider an equity release arrangement through your local authority. Your council pays your care costs and then deducts the money on your death, once your house has been sold.
Ensure you and any carers are claiming all the benefits you can.
Those who spend at least 35 hours a week time looking after friends or relatives could be eligible for the carer's allowance. They will need to care for someone who receives one of the following benefits:
-Disability living allowance at the middle or highest rate for personal care
-Constant attendance allowance at or above the normal maximum rate with an industrial injuries disablement benefit. Or at the basic (full day) rate with a war disablement pension.
The carer isn't eligible though if they earn above £100 a week, after tax, NI and pensions contributions.
The weekly rate is currently £55.55 although this is reduced in line with other received benefits.
Those aged over 65 or with a disability severe enough to require care may be entitled to the attendance allowance, which pays £47.80 a week for help in the day or night and £71.40 for 24–hour supervision.
Get further advice
There are a variety of organizations that can advise you more fully of your options depending on your specific circumstances:
Saga care funding advice line: 0800 096 8703 or email@example.com
AGE UK advice line: 0800 169 6565 or firstname.lastname@example.org
Consumer Credit Counselling Service helpline: 0800 138 1111