News
1m+ homes sold to fund care costs for elderly
More than a million older people have sold their home to fund the cost of care in the past five years.
Research from NFU Mutual revealed that one in seven (15%) people believe that they will be able to fund their own retirement through inheriting property or cash from their parents.
However, three in every four people whose parents go into care now could face most of their inheritance eaten up by the associated costs.
Over a million homes have been sold in the last five years to pay for long-term care costs and more than two million elderly people have had to use their savings to fund care.
Sean McCann, personal finance specialist at NFU Mutual, said:
“Younger generations could be in for a long wait if they’re banking on an inheritance to fund their retirement. People should be making their own retirement plans rather than factoring in property and wealth that could be whittled away by the cost of care and inheritance tax.”
The research highlighted poor understanding regarding the cost of care and a lack of inheritance tax planning. A third of Brits (31%) said their parents made no plans for the impact of old age care on their estates and a similar number (32%) admitted they have failed to factor this cost into their own planning.
And the gap in retirement provision is set to worsen as councils tighten budgets for elderly residential care. Freedom of Information data collected by NFU Mutual shows more than half of councils (53%) have slashed their care budgets over the last five years or reduced actual spending, suggesting a tightening of purse strings when it comes to old age care.
McCann concluded: “There’s no magic bullet to avoid care home fees during your lifetime but, with careful planning, you could protect your share of the family’s wealth after you die.
“Anyone who wants to see their life savings and the family home handed down to children and grandchildren needs to take professional advice to make sure they’re not paying more tax than they need to.