Rising cost of elderly care ‘leading to stretched retirement finances’

Older people are finding their retirement savings are not stretching as far as they need to due to the rising cost of care for the elderly.

A new study from LV= has indicated that the average length of stay in a care home has increased by 13 per cent over the last decade from 829 days to 955 days, which equates to two years and seven months.

More than twice as many women require long-term care than men, with the average spend on care now climbing to £75,000 per person – an amount that exceeds the average total pension pot.

Of the people included in the survey who have had a parent go into care, 38 per cent said their parents had used their savings to cover the cost of care, with 22 per cent saying it had been necessary for their elders to sell their home to pay the bills.

Meanwhile, a new Freedom of Information data request by LV= showed that in the past five years, more than 19,000 retirees have had a charge placed on their property by their local authority to meet the cost of their care.

It was also revealed that 25 per cent of adults with parents in care say they are using their own money to help fund their parents' care costs, suggesting the impact of this trend is multi-generational.

Further evidence that this problem affects women disproportionately was provided by the fact that 23 per cent of females approaching retirement have only the state pension to rely on, compared to just nine per cent of men.

John Perks, managing director of LV= Retirement Solutions, said: "Low interest rates, coupled with social care budgets being cut, create a worrying financial backdrop for many, especially those already in retirement as they are currently faced with an open-ended bill, which makes it difficult to plan effectively to fund these costs.

"We would encourage those individuals in and approaching retirement, to seek financial advice."