Capital Also Less Prepared For Later Life Despite Highest Care Home Fees
Londoners over 40 are less likely to know when they want to retire and to have saved money during lockdown, a new survey has found.
Leading national law firm Irwin Mitchell and YouGov surveyed over 40s on their attitudes towards later life planning during the pandemic, revealing some regional differences that set London apart from the rest of the UK.
Retirement planning lacking for Londoners
When asked about when they planned to retire, a quarter of Londoners aged 40+ (24 per cent) didn’t know; five percentage points higher than the national average (19 per cent), and had the lowest percentage in the traditional 60-69 age range (46 per cent against the 53 per cent national average).
Londoners aged 40+ were also the most likely not to know where they would like to live for retirement – if they could not live in their own home due to age or illness, with almost a third (31 per cent) from the capital choosing this option while the national average sat at a quarter (26 per cent). However, for their own personal circumstances, they were slightly more likely to favour a stamp duty land tax (SDLT) break for over 65s as a way of paying for later life care, with 13 per cent choosing this compared to 10 per cent national average.
The average weekly price of care home fees in London has risen to £744 for residential care and £902 for nursing care – some of the highest prices in the UK.
Experts at Irwin Mitchell say the lack of planning for the capital is concerning given the high costs of care and property.
Expert Opinion“Everyone knows that the nation’s capital is an expensive place to live – and yet it is worrying that those based in London are less prepared for retirement than other parts of the UK, despite the increased costs of later life care.
“It’s understandable that Londoners feel they would benefit most from a SDLT break, as skyrocketing house prices limit many from downsizing into smaller homes or even from purchasing a home in the first place – but the fact is that people shouldn’t be relying on one policy to ‘fix’ later life planning, and should be saving sooner rather than later.
“At the end of the day, social care reform is the only way that will essentially guarantee planning for later life for many, especially in expensive places like London and the South, and give the public one less thing to be concerned about.” Stewart Stretton-Hill - Senior Associate Solicitor
Lockdown: saving or spending?
Londoners aged 40+ also had some different saving habits during the first lockdown.
Those in the capital were less likely to have saved more money than usual during the pandemic; while the national average sat at almost a third (31 per cent), London lagged behind at just under a quarter (23 per cent). Londoners were also far more likely to have not saved money before the pandemic either, with 24 per cent choosing this ahead of the 18 per cent national average.
When asked what they’d do with any savings, Londoners were slightly more likely to choose investing (22 per cent compared to the national average of 17 per cent) ahead of spending it on a holiday (20 per cent as opposed to the national average of 25 per cent).
Of those who said they hadn’t been able to save money during the pandemic, Londoners aged 40+ were most likely to answer that they haven’t been able to save because of an increase in household bills; a third (32 per cent) of respondents in London said this against the 26 per cent national average.
Expert Opinion“It’s perhaps unsurprising to see that a city as expensive to live in as London has unfortunately meant some respondents have been less likely to save during lockdown – though it is gratifying to see they were more interesting in long-term financial planning like investing rather than focusing on short-term goals like holidays.
“Investing is a brilliant way to build wealth in the long run and is even easier to access thanks to the many apps and services available to help put even tiny amounts of money into investments. You can also speak to a financial adviser if you need help on knowing where to start.
“The figures are also a clear call for the Government to set out a clear social care reform plan that helps every region, so those investing and planning for later life can make sure their money is put to the best use during retirement.” Richard Potts - CEO of IM Asset Management Ltd