Care system could collapse in a decade unless the Government intervenes, report warns

24 February 2020

People will need to save hundreds more into their pensions each month to fund care in old age

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The UK care system faces collapse by the end of the decade unless the Government takes action, a new report warns.

Research by Irwin Mitchell and the Centre for Economics and Business Research (Cebr) shows the care system could reach a tipping point by 2029.

This will partly be because people are not saving enough into their pensions, but other factors include a shortage of council funding, the end of final salary pensions and not enough care homes being built.

Josie Dent, senior economist at Cebr, says: “The elderly care sector is desperately in need of reform in order to avert the imminent crisis.

“With the cost of care set to rise, many more elderly people will find themselves using up their wealth or turning to local authorities for support to pay for care in the future.

“With care providers being increasingly stretched, the government needs to increase its efforts to prevent the crisis from reaching a tipping point.”

Due to their very high costs, private sector businesses have scaled back on offering defined benefit pension schemes which are based on the worker’s salary and number of years they have worked for the company.

Despite the introduction of auto-enrolment pensions in 2012, many people will need to save hundreds of pounds more into their pensions each month to fund care in retirement, the report warns.

It says that UK employees are paying in an average monthly pension savings amount of £225, well below the £799 needed to get a moderate standard of living when they retire.

The cost of nursing homes is also set to rise to £54,375 a year over the next 10 years, while the cost of residential homes will hit £39,124.

The report says this wealth gap could result in a tiered elderly care system, with only around the top 10% of retired households by income able to afford to pay for nursing homes from their income.

Demand for care homes is also expected to increase as the number of elderly people rises.

The current nursing and care home capacity is around 460,000 beds, according to figures from LaingBuisson. With demand expected to reach 480,000 by the end of the decade, the UK will face an upcoming shortage of elderly care accommodation unless more care homes are built.

Financial pressures mean local council are increasingly struggling to provide social care.

Spending on social care has fallen by more than 10% over the last decade as local authorities have slashed their budgets.

The Local Government Association estimated in 2018 that adult social care services would face a £1.5 billion funding gap in 2019-20, growing to to £3.5 billion by 2025.

Ros Altmann, former pensions minister, says: “Almost no-one has planned for long-term care. Despite growing numbers of frail, older people in our society, neither central nor local government has a sustainable plan to pay for care and there are no incentives for private individuals to set aside funds to meet later life care needs.

“Pensions are designed to support independent living, not the sharply higher costs of care. This important report uncovers many of the consequences. There are many aspects to this massive policy failure, which has been left unaddressed by successive governments for so long that there is no silver bullet solution.

“The sooner we all start planning for care, the better. There are measures families can take, but there are also important policy reforms which could help alleviate this crisis."

Homeowners are often forced to sell their properties in order to fund their social care in later life, wiping out their children’s inheritance.

According to charity Independent Age, since 1999 more than 330,000 older people have sold their homes to pay for care.

The long-awaited green paper on social care was put on hold last year.

During the election, the Conservative Party said it would provide £1 billion of extra funding a year for social care, as well as a commitment to seek cross-party consensus for long-term reform.

It also promised to introduce a system which means no one will have to sell their home to fund long-term care, but details of this were vague.

Comments

The government don't care -…

The government don't care - they want for nothing with their millionaire bank accounts, so anyone who needs care in the lower income groups are basically scum to them and don't deserve the care they deserve. This stance is already proven by their hostile environment for sick and disabled people of working age. They'd rather line their pockets than pay for care - they're already using National Insurance contributions to pay the deficit and national debt down - which is not what that money is earmarked for!

Rehab after an opertation

I am 75 years of age and no direct family. I have just had a full hip replacement and after 4 days was discharged from hospital with not help given I was left to my own defence, getting up the stairs, getting into bed, washing etc. This experience was more dramatic than actually having the hip replaced. The service offered to the community these days is all lip service and no actual help.

Coronavirus Mass Killing Conspiracy?

Is this the real reason why the UK Government targeted care homes by sending them coronavirus infected people? Either they were incredibly incompetent or it was their intention all along to get rid of as many benefit and pension recipients as possible to ease public purse expenditure in this area. Too much of a coincidence for my liking.

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