Britain’s Ageing Population & the Impact on Care Fees

There’s no let-up in Britain’s ever increasing elderly population.  Over the last 50 years, the average life expectancy across England and Wales has increased by approximately 10 years for men and 8 years for women. According to official forecasts, better healthcare and previously high birth rates in the post-war “baby boom” mean that the UK’s population of older people will rise dramatically over the coming years.

Meanwhile, the soaring cost of care home fees pose a huge concern for the UK. In England’s most popular retirement destination, the South West, the cost of care in 2012 rose 8.7% to £31,304 per annum on average for a single room.

With 62% of people now believing that they may face ‘significant financial sacrifice’ in order to secure care for their loved ones at some point in their life, what can the government do to aid the deficit?

Pension Reforms

Details of the coalition’s pension reforms include a new flat-rate state pension worth an estimated £144 per week in today’s money, in an attempt to provide the UK’s elderly with “the minimum” they will need.

Under the government’s plans, the state pension age for women will also be brought into line with men at 65 in 2018 before rising to 66 by 2020 and 67 by 2028.

The reform aims to even out distribution of the state’s provisions by making basic funds available to everybody. However, investment in a company pension plan, or saving funds in a private nest-egg throughout life is strongly encouraged.

The Dilnot Report

David Cameron is expected to announce he will accept a cap on care costs to come into force sometime after 2015, in a move prompted by the Dilnot report.  The report calls for a system of funding that will guarantee no one will pay in excess of £35,000 total care in their lifetime.  However, this government initiative would only apply to care costs and not accommodation, meaning that families would still have to find the cash to cover a roof over their head.

NHS Continuing Care

The NHS Continuing Care program works by providing assistance to those who qualify under a stringent set of guidelines.  Any patient about to be discharged from hospital who may be eligible for continuing care must be assessed and if ill-health is the main reason for them moving into a home, then it’s likely that they’re eligible for the initiative.  If they are, the NHS is liable to cover all costs, including accommodation, with no ceiling on the amount paid out and no means test.

It is strongly advisable to build substantial personal funds to ensure a level of comfort for later life.  With rising life expectancy, it’s realistic for many of us to expect to spend 45 years in employment followed by as many as 30 years in retirement.

This article was contributed by Laura Moulden on behalf of Cheselden. To find out more about NHS Continuing Care in the UK, visit today.

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