New Research From Irwin Mitchell Highlights Knowledge Gap Around Care Home Fees
Millennials are thinking more about saving for elderly care than baby boomers but there remains a big knowledge gap across all age groups, a new study has found.
The research by YouGov for law firm Irwin Mitchell asked over 2,100 adults living in Britain about their attitudes towards planning for later life including care home fees, passing down wealth and inheritance.
It revealed that 60% of respondents were not currently saving for potential care fees in later life and had no plans to do so – just 9% were currently saving. This is particularly concerning as 70% of the population admitted that they had no idea how much care home fees cost a year.
Expert Opinion“The lack of knowledge about care fee costs, and the lack of action to plan for future financial arrangements, is worrying across all age groups. This later life knowledge gap is going to cause significant financial problems for many people as they are simply not prepared for the future.
“Many people don’t want to be thinking about the future or talk about it with their families when there are often more pressing financial issues in the present such as buying a home and the costs of children and education.” Kelly Greig - Partner
Further insight into the age of respondents shows a dramatic difference in their attitudes to financial planning. Of those aged 18-24, 54% were either saving already or planned to save specifically for potential elderly care fees in the future; 67% of people aged 45-54 were not currently saving and do not plan to save care fees whilst 73% of over 55s said the same.
Specialist tax, trusts and estates lawyers at Irwin Mitchell argue there could be a number of reasons for the willingness for baby boomers to ‘bury their heads in the sand’ in comparison to millennials, who have grown up with technology and better access to personal finance resources.
They argue it could be a mix of factors including traditional financial pressures, and an unwillingness to accept the inevitability of growing old – but all agree that the cost of no planning could be catastrophic in the coming years.
Kelly continued: “What is most concerning is that people in their forties and beyond are the ones who are likely to have the most exposure to the care system, and yet do not seem to be planning for their own care – and as the stats show, nobody seems to have much of an idea of what an average cost would be.
“It certainly doesn’t help that there is no such thing as a standard care home contract, so taking advice from a professional becomes even more important. The results suggest that millennials seem to understand the need for forward planning while their parents do not.
“We know we have an ageing population and the social care system is already strained. In twenty years’ time it’s difficult to predict what the landscape will look like, but the signs are not looking promising.
“It feels like as a nation we are sleepwalking into a later life care crisis. There is no guarantee of what social care funding will look like in the decades to come, so why take the risk of not planning properly?”