Retirement: Over 55s could be hit with £260,000 bill to pay for care costs | Personal Finance | Finance

This comes as the cost of retirement has skyrocketed within the past year and the Government’s delay in introducing a cap to charges. The cost of social care has risen significantly as providers have struggled to pay for soaring energy bills and the hiked prices of services. As a result of this, over 55s may not be able to afford a decent retirement for themselves in later life.

On top of this, future retirees will not be able to pay for a self-funded two-year stay in care, which is the average length of stay in a home, according to new research.

Wealth management firm Quilter reports that this would only be achieved by having a pension pot of at least £469,000.

Figures from the Office for National Statistics (ONS) suggest that those between the ages of 55 and 64 have only £211,000 in private pension savings on average.

This means that households approaching retirement would need to pay an additional bill of around £260,000 to pay the rest of the care costs.

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Someone who is single and 65, who is planning to self-fund retirement and two years of nursing care, will require an extra £84,652 in 2022 compared to five years ago.

As it stands, the Chancellor Jeremy Hunt has postponed legislation which would introduce a cap on how much someone has to spend on personal costs over their lifetime at £86,000.

Originally, this policy was meant to be implemented in October 2023 but it has been delayed to October 2025.

Older Britons are already more likely to be detrimentally impacted by the rise in the cost of living with many more reliant on keeping the heating and electricity in their homes on.


The UK’s latest Consumer Price Index (CPI) rate of inflation has increased to a 41-year high of 11.1 percent.

On top of this, energy bills for households with average usage have risen by 27 percent since October, even with the Government’s price guarantee in place.

While costs are expected to come down in the next few years, those a year or under from retirement may be forced to direct thousands of pounds away from their retirement to pay for rising energy bills.

Shaun Moore, a financial planning specialist at Quilter, broke down why the existing system for social care is inherently “unsustainable”.

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Mr Moore explained: “The Government promised in its 2019 manifesto that they will seek cross-party consensus on proposals for long-term reform of social care.

“But it has become a poisoned chalice for successive Prime Ministers due to the eye-watering cost of fundamental reform.

“The current system of social care funding is widely acknowledged as being unsustainable, yet the can was once again kicked even further down the road in Mr Hunt’s recent Autumn Statement.”

He added: “This will cost thousands for people entering the care system prior to 2025 when the social care cap is now proposed to come into force.”

The financial expert noted that the future retirees will have to “think carefully” about their next steps financially.

He added: “Whatever solution is eventually in place, people will still need to think carefully about saving for their own care, as whatever is on offer is likely to be the bare minimum.

“Personal provision for social care will make up the vast majority of how someone pays for the care they need.

“It certainly won’t be a small amount so people should think carefully about not only saving for retirement but also for social care.”

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