Only 2% of the UK's Over-55s Have Long-Term Care Insurance

Sep 23, 2011
Carol Finch

How Many UK Over-55s Are Ready for Long Term Care Costs? - Photo by forwardcom

According to the latest issue of the Aviva Real Retirement Report, the costs of long-term care in the UK concern older people but few have insurance.

This month's Aviva's Real Retirement Report highlights some of the current issues and worries that older people face when it comes to long-term care in the UK. According to a report on the company's findings (70% of over-55s do not believe they should pay for care, September 21, 2011), only 2% of those polled in the 55+ age group have any kind of insurance in place to help cover future costs. What are their thoughts on the current care system, what are they worried about and where will the money come from?

46% of Over-55s Want Universal Care Standards

Many older people find it difficult to plan for long-term care because the current system is confusing and lacks cohesion. At the moment, an individual who needs to move into a home or to arrange care at home may be liable for some/all of their costs on a means-tested basis. The state will fund those on lower incomes and may also take over liability for people who do initially have to pay, but who then deplete their assets down to qualifying levels.

But, the system does not necessarily work to the same standards all over the country and there is some disparity of services offered by local councils. According to this report, 46% of those polled would like the government to establish clear standards of universal care with 47% saying that there should be clearer information. As Jonathan Bruce, MD of Prestige Nursing+ Care, states in The Real Retirement Report: "People in this situation often don’t fully understand their rights or what they are entitled to. As a country, we need to seriously look at how we fund care but also how accessible it is to people who need it.”

12% of Over-55s are "Terrified" About Potential Long-Term Care Costs

Paying for care in old age tends to be a worry for most people in this age group. Only 19% say that they are relaxed about these costs; at the other end of the scale 29% are worried and 12% are terrified. Although many don't think that they ought to pay, most know that the government is unlikely to take over. But, although there are very real concerns here and most are aware of how much retirement homes can cost per year, 53% of the over-55s still have no formal financing plans in place.

How do Older People Plan to Pay for Care?

Whilst 70% would prefer not to pay for care, they concede that it is unlikely that the state will be able to pay for everyone. Long-term care insurance is an option for just 2% of those who have planned ahead. Although commonly used in other countries, these policies are not offered on a widespread basis in the UK. Others will be looking to raise finance in other ways such as savings/investments (13%), home equity (9%), pensions (3%) and help from family (3%). 14% of those polled still believe that the state will meet all their costs.

Although the UK still technically works on a "cradle to grave" social system, the reality is that many people will have to pay for some or all of their own care costs as they get older. The system may, however, be changing. The Dilnot Commission's recent Fair Funding report recommends contribution caps, an increase in means-testing levels and a set nationwide system – these could all alleviate some of the concerns raised in this report.