A quarter of retired home owners are having to sell their home to fund their old age.
A rising number of families are being forced to sell their home in order to meet the cost of paying for residential care. Charities and pension experts say that this is due to the Government’s overhaul of the English social care system not going far or fast enough to help families.
Research commissioned by NFU Mutual has found that three quarters of people that go into residential care in old age may have to sell their home to pay for it. It warns that millions of younger people who are currently relying on an inheritance to fund their own retirement could be facing serious financial problems if alternative plans are not made.
It was also highlighted that more than half of councils have been forced to cut spending on residential care in the last four years, even after efforts to shield the sector from the effect of cuts in budgets.
The current system in England says that anyone with assets, which includes their home, worth more than £23,500 get no financial support if they have to go into a care home. However, the average cost of a room in care now stands at around £28,000 a year but those needing more intensive nursing care, annual bills could reach well over £40,000. Overall officials estimate that only one in eight elderly people will ever qualify for the cap.
It is estimated that 1.1 million properties across the UK have had to be sold in the past five years to pay for care. Regularly quoted Government estimates claim that only around 40,000 people a year have to sell their family home to pay for care each year. However Government figures are based largely on numbers who go into care homes with only enough savings to last a few months and do not include those who sell their homes first.
The higher estimate by the NFU Mutual is echoed by recent research by Prudential which found that more than a quarter of retired home owners are already preparing to sell their family home to fund care or general retirement expenses.
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How to fund Housing Support and Social Care Services
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