Cost of care homes

In 20 years time, a four-year stay in a care home will cost an eye-watering £223,000, according to a Saga survey.

That’s double the cost of four years care now and will no doubt strike fear into Baby Boomers’ hearts everywhere – it is they who will be paying those costs. Their children will also have been alarmed by the report - they could see their inheritance disappear if their parents are in residential care for any length of time.

It highlights the need for people to plan ahead for care. While previous generations may have relied on (or hoped for) the state to provide for them in old age, it is becoming clear that, especially with an aging population, this is not going to happen. It is becoming accepted that some, if not all, care costs will have to be met by the person in question or their family.

The care funding system is being reviewed and is likely to be reformed later this year. It is hoped that the much-disliked means testing system will be abandoned with a financial model based on a partnership between state and individual replacing it.

While many people will be reluctant to plan for something that may never happen, a system like this may prompt the more savvy to put something away for their old age. If they know they cannot rely on the state and do not want to face the possibility of having to sell their house to fund their care, then a bit of financial planning now could make things a lot easier in 20 years time.