With an ageing population and increasing longevity, the UK population is set to face a crisis on how to pay for the elderly care that will be needed over the next decades.
Out of those aged 45 and over, 42% think they will be able to pay for their elderly care through personal savings and 34% think the state will pay, according to new research by SuperCarers, which surveyed 1,050 people. Currently the cap on when an individual’s care costs can be supported by the state stands at £23,250.
Two million elderly people in the UK have a care-related need and four million will need daily help by 2029, according to the study. By 2025 it estimates a deficit of 600,000 carers.
Further, various surveys have shown that people underestimate longevity. Millennials expect to live to 80, but one in five of them will live to 100, twice as many as their grandparents' generation.
While those aged 35 to 44 have a more realistic expectation, in that they believe they will live to 84, there is still an 18% chance that they'll reach 100. This indicates that many are not factoring in how far their savings will need to stretch.
In an exclusive interview with Money Observer, Moneywise’s sister magazine, former pension minister Ros Altmann flagged the issue of increasing care costs: “If [economist and social reformer] William Beveridge was designing the welfare state today, unquestionably he would build in a national insurance scheme for long-term care. In his day the concept of living 40 years past pension age was not on the cards.
“From an inter-generational perspective, there is going to be a lot of pressure on a smaller cohort of middle-aged people, and it's not clear where the money is going to come from to support the ever-increasing number of older people, but it will have to be found.”