UK. The rising cost of care
What does the chart show? The disposable incomes of pensioners aged 65 to 74 after direct taxes are likely to increase by 1.9 per cent a year over the next 10 years — to give an average annual income of £41,500.
However, with the average weekly cost of nursing care for self-funders at £1,035, the majority of retired households requiring these services cannot afford to pay the annual fees of £53,820 out of their income, according to research by Irwin Mitchell and the Centre for Economics and Business Research (CEBR).
Their report, “Elderly Care Crisis: A Tipping Point”, found that a worrying wealth gap is opening up, as only the top 10 per cent of retired households can afford to fund nursing home care from their incomes. Currently, those aged 65 to 74 have the highest incomes after direct taxes.
However, the over-85s — the group most likely to be in a nursing care or residential home — are expected to have an average income of £30,800 by 2030, far short of the cost of care.
Effectively, those who need to pay for care must use other sources of wealth to make up the difference. One-third of households aged 65 and over have pensions, property and investment wealth valued at less than £300,000. The wealthiest 25 per cent of households have more than £1m in assets.
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