Families are vastly underestimating the cost of elderly care leading to fears of a significant shortfall in funding, according to the Centre for the Modern Family.
Research conducted by the independent think tank, which is funded by pension provider Scottish Widows, has found that most people underestimate the potential costs of care for themselves and their elderly relatives.
On average, those surveyed for the research believed residential care would cost £549 a week, when in reality the average cost is £866 – a shortfall of £317.
One in four people (25%) admitted that they had no idea how they would cover the cost of care for themselves or a relative, while nearly half (49%) said they avoided thinking about the issue as it was too stressful to contemplate.
Just under half (49%) believed that the burden for care should be shared by the whole family, but nine in 10 people (92%) admitted they had nothing saved in order to help pay for their parents’ care costs. On average those surveyed believed they could only afford to give £69 per week to support their parents’ care costs.
Nearly one quarter (24%) said they would be wholly reliant on state support, but two fifths (42%) of those surveyed didn’t fully understand what benefits they could be entitled to.
Number of people in care set to double
The think tank has called for the availability and awareness of state benefits to be made clearer, as the number of those in care is set to double by 2035.
Jane Curtis, chair of the Centre for the Modern Family and non-executive director of Lloyds Banking Group Insurance, says: “The number of people in care in the UK will almost double by 2035. Our research shows that an over-reliance on relatives and the state could put families in serious financial difficulty. It can seem difficult to know how to prepare for the future, but to avoid a financial care crisis we all need to have an honest discussion on later life care as early as possible so no one is left footing a bill they can’t afford.
“As for state provision, it’s clear that many people simply don’t understand the social care benefits and support system. Providing clarity and raising awareness of what is and isn’t available is critical to helping people prepare for the longer-term future.”