Long term care bill to rise by £16bn
The annual cost of long term care in the UK is expected to rise by £16 billion by 2025, according to a report.
The Future of long term care report, launched today by insurance company LV, shows the number of people that will need to make use of formal long term care services will grow from 840,184 today to 1.1 million by 2025, an increase of 37 per cent.
The annual cost of long term care is also expected to rise, from £26,000 currently a year to £33,000 per person by 2025. This puts the total cost of long term care for the elderly in the UK at £37.9 billion a year by 2025, compared to £21.8 billion now.
Almost one in five Britons are expecting to fund their own long term care. Of those, one in seven said they would rely on the state to cover their care costs, and 12 per cent do not think they or their family would be able to afford any care and do not know how they will pay for it.
A report from the Dilnot Commission, published last July, calls for a cap on individuals’ lifetime contributions to social care costs of between £25,000 and £50,000, with £35,000 the recommended figure. The government have yet to respond to the report.
LV’s report said 88 per cent of people asked believed the government needed to set a cap on how much people pay towards long term care.
Vanessa Owen, head of equity release at LV, said: ‘The UK is facing an uncertain future on the funding of long term care. Low interest rates and living costs continually on the up, coupled with social care budgets being cut, creates a worrying financial backdrop for many, especially those in retirement.
‘It is a real concern for people who have the burden of long term care costs approaching, as currently they could be faced with an open ended bill which makes it difficult to plan effectively to meet these costs.
‘The government needs to address the Dilnot report, and introduce some sort of cap to ensure that people can properly plan for the possibility of paying for care, and that people’s total wealth isn’t quickly eroded.’