Property wealth is key to care funding for over 55s

24 July 2020 - 10:50 AM

Download the full report here.

Property wealth is growing in importance for funding care in later life as faith in savings and pension income falls, a new report ‘Tackling the Care Question’ from the UK’s leading over-55s specialist adviser Key shows.
Key’s second report into care funding has highlighted a major shift in attitudes to using property wealth to fund care - around a third (29%) of over-55s plan to use their homes now compared with just 19% a year ago.
That is reflected in a similar downturn in confidence in being able to fund care from savings and investments or pension incomes partly driven by historic lows in interest rates and continuing stock market volatility.  Just 34% of over-55s (44% - 2019) believe their savings and investments will help fund care while 30% (40% - 2019) say they will use pension income.
Key’s study shows over-55s overwhelmingly want to receive care in their own property – with three-quarters (75%) planning to either stay in their current home or move to a more manageable property. Just 4% would prefer to move to a care home.
Key’s research shows a quarter of people either don’t know how they would meet their care costs (15%) or wouldn’t be able to meet the costs (10%). One in 12 (8%) would have to sell any valuables they have to fund their care in 2020 – up three percentage points compared to 2019 (5%).
Care funding squeeze
Key’s report asked councils in England, Wales, and Scotland via FOI what proportion of those who needed long term care, they paid for in full and what proportion received some financial assistance.  Data collected suggested that there could be as much as a 10% YOY drop in the number of people receiving some form of financial support for care between 2018/17 (568,867) and 2019/20 (512,816). Of the more than 205 bodies that responded, 18% were unable or unwilling to provide the requested data1.
Will Hale, CEO at Key, said: “When you speak to people, you find that the vast majority are keen to receive care and support in the comfort of their own home but struggle to know how, or how best, they might meet these costs.  With the recent economic turmoil, confidence in savings and pension income has fallen while more people are looking to the value tied up in bricks and mortar to finance care.  Getting good advice and understanding what resources you have to draw on is important – and making sure you factor these potential costs into your retirement planning is vital.
”At the same time as councils are under pressure, over-55s are waking up to the reality that they may well need to pay for all or some of their care in later life.  This has created the perfect storm and it is vital that the Government focuses on setting out clear plans for reaching a cross-party consensus on social care, and consider long-term reform and funding of the care system. “
Percentage of people who would use different means to fund their care
MEANS OF MEETING THE COST OF CARE Percentage of people planning to do this in 2020 Percentage of people who planned to do this in 2019 Change – percentage points
savings and investments 34% 44% -10%
pension income 30% 40% -10%
some / all the value of my home 29% 19% +10%
sell any valuable items I have 8% 5% +3%
look to my family for support 5% 2% +3%
Don’t know 15% 15% n/a
Council would need to pay 12% 8% +4%
Unable to meet costs 10% 5% +5%
1           In June 2018 (2017/18 Report) and August 2019 (2018/19 Report), Key submitted Freedom of Information Act request to over 205 councils.  These requests were followed up and processed over the following four to six months to allow for councils to respond.  For the 2018/19 Report, 18% or 36 councils were unable or unwilling to help so figures for 2017/18 have been used where possible to provide a more accurate a picture of the level of long-term care funding across Great Britain
East Midlands 6,019 15,223 17% 33%
East of England 29,334 28,499 68% 41%
London 22,937 32,448 39% 52%
North East 2,980 2,353 13% 30%
North West 11,609 10,317 23% 19%
Scotland 8,108 4,444 21% 15%
South East 37,350 17,906 28% 29%
South West 27,509 25,863 45% 45%
Wales 3,124 4,709 16% 23%
West Midlands 11,124 11,548 19% 22%
Yorkshire 15,162 13,356 33% 33%
GREAT BRITAIN 175,256 170,877 31% 33%
2        Research conducted by Opinion Matters among over 1,011 UK adults aged 55+ between 9th and 13th March 2020.  2 Research conducted by Opinion Matters among 1,024 adults aged 55+ between 30th November and 5th December 2018
Back to News