Why the ticking time-bomb of care is yet to fully explode
Have you considered what you’ll do when you retire? Go off on a round-the-world cruise? Potter round the garden? Play golf or enjoy long walks in the country, followed by a pub lunch with friends?
For some of us, this is undoubtedly how it will pan out. For the richer retirees life is, or will be, good.
But a healthy later life isn’t a given. The most up-to-date ONS figures show that at age 65, men in the UK can expect to live on average another 10.7 years in good health. Women can expect to live 12.1 years in good health. For both sexes, this constitutes just under 60% of their expected remaining life span.
And here’s the killer statistic for me: Men aged 65 in the UK can expect to live their last 7.5 years with a disability. For women, the average is 9.7 years.
The cost of care
Yup, we’re not all superhuman. And once our bodies start to fail us, we usually end up needing some form of care — whether that’s at home or eventually in a care home.
It’s a topic that we don’t often talk about, mainly because it taps into our fear of death and our own mortality.
But care is big business and — in the UK at least — it’s less and less likely to be funded by your local council and more likely to come out of your own pocket.
The most recent estimates put the care market at £22.2bn, split 60/40 between residential and non-residential care.
In 2016, the average weekly cost of a room in a residential home in the UK was £600, and a room in a nursing home costs £726. That’s on average — it varies drastically in different parts of the country with London and the South East costing significantly more.
Statistics show that the median length of stay in a care home is 15 months, so on average it will cost £36,000 for the final months of your life.
The other big cost is in those years when you’re still at home, but can’t quite do everything you want to.
You may need someone to come and do a bit of gardening, some ironing, small DIY jobs, or even drive you somewhere if you can’t get out as much.
As your health declines, you might need some support with cooking or personal care.
None of this is out of the ordinary. But what’s changed as council budgets have been squeezed is that money for social care exactly as I’ve just described has vanished.
In January 2015, Age UK put that in real terms as a drop of £1.1bn since 2010/11.
How will you pay for this care?
Pensions that you can actually live on are becoming increasingly rare.
Saving for retirement has become as unfashionable: “My house is my nest egg,” is a phrase I’ve heard over and over again.
But if you haven’t got money to live day-to-day, what good is owning your own home.
The bottom line is that a lot of people are going to have to sell their homes to be able to afford care costs.
You won’t get much help from government and — even though there’s no way to force someone to sell — the reality is that freeing up equity will become a necessity.
Right to buy — forced to sell?
Thirty-seven years ago, the introduction of the Right to Buy scheme by Margaret Thatcher was a huge step forward for many less well-off families, enabled them to become homeowners.
Many of these families are part of the Baby Boomer generation who have cashed in on the housing boom, as prices soared.
This post-war generation is now coming to the time of their life when they’re likely to need care. They will be the first generation that finds that social care is no longer widely available from local authorities.
Let us hope that one of their last acts is not being forced to sell their homes (not currently necessary while they still live there) — the very ones that lifted them out of poverty in the 1980s — in order to remain independent for as long as possible.
The bomb is ticking… Have you thought how you’ll pay for care?
