The majority of adults in the UK are not making enough provisions to cater for care home fees, a survey by law firm Irwin Mitchell Private Wealth has found.
The study was carried out by YouGov, the London-based public opinion and data company, which polled over 2,000 British adults on their attitudes towards planning for care home fees in the UK.
According to the research, only 9% of respondents are currently saving for that possibility, with 65% not putting anything aside and 31% thinking that such fees would not be sourced from the individual’s estate.
Additionally, YouGov found a correlation between respondents with children and those without. The findings show that the more children an individual had, the less likely they were to think that funding for their later-in-life care came from their estate.
Over half (59%) of respondents without children believed that fees needed to be sourced from their estate, compared to 41% of those with children.
Inheritance ‘first thing to go’
While parents seem to expect their children to contribute to their care home fees, young people risk being put under even more financial strain as they seek to raise their own families and/or purchase a home, not to mention saving for their own retirement. There is also the fact they would not be likely to receive a “traditional inheritance” after the fees were paid.
Kelly Greig, partner and head of later life planning at Irwin Mitchell Private Wealth said: “The results are interesting in that they reflect a gap between the intention of saving for care – taking funds from savings was the most popular choice after the traditional avenues of paying from the estate and government funding – versus the reality of it, considering a big majority the survey said they had no plans to save for care home fees.
“This reflects a concerning attitude towards putting off the hard questions about growing old, when planning ahead now could be the difference between having enough to keep the family home for the children and grandchildren to inherit – otherwise the inheritance is the first thing to go.
“The ageing population crisis is with us now and will only get worse if families do not consider their options for the future when they’re younger to give them enough time to save.”
Expectations vs reality
The study also found that nearly half (44%) of people aged 18-34 thought care home fees would be paid by other family members, compared to 31% of respondents aged 35+.
This, said Irwin Mitchell PW, suggests the younger generation expects some form of inheritance, considering the more challenging financial landscape to the one faced by previous generations.
Greig added: “It’s likely there are conversations happening between parents and their children over expectations on what they’re going to inherit, or even an unspoken understanding between the two that money will be in the pot for a generation which is going to struggle more financially than older generations had to.
“The logic of this thinking makes sense – for many house prices have skyrocketed up, therefore significantly increasing the size of their estate and leaving more money for their heirs to inherit. The survey results certainly lean towards this way of thinking based on how many children are involved.
“Care home fees undoubtedly throw a spanner in the works that many people simply aren’t considering and burying our heads in the sand about it will not help.
“We strongly advise for everyone to have a plan for care home fees in place, and to speak with a wealth manager if they are concerned – even if they don’t consider themselves to be ‘wealthy’, advice from a professional will be invaluable.”
