Thousands of people currently looking after elderly parents may be underestimating how much is needed to pay for their long-term care.

Research conducted by Canada Life earlier this year among 644 adults over the age of 60 in the UK showed more than one in ten of them are caring for a family member. Those in this age group say they expected the cost of care to be about £1,100 a month on average.

In reality, the number runs closer to £1,600 a month on average, although costs can be considerably higher than this, depending on the individual’s needs. The research highlights a lack of understanding around the huge cost of care, which could lead to people in this age group having to make tough financial decisions to help parents make up any shortfall they weren’t prepared for.

Alice Watson, head of insurance at Canada Life, said: “With people living longer lives, the requirement for social care will become a growing necessity and norm among society.

“We need to do more to highlight the options available for later life care and have these conversations early on. Speaking with a financial advisor or family member is a good place to start.”

Separate research carried out at the end of last year by interactive investor found that the cost of care ranked as the most troubling financial worry to 12% of retired respondents, above the rising cost of living, tax and not being able to help out younger family members with large expenses.

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Changes to long term care costs

Several changes are due to come into effect next year which will affect the amount people need to pay for long term care.

Under current rules anyone in England with assets over £23,250 must pay for their care in full. However, from next year:

  • If your assets are less than £20,000, from October 2025, you won’t have to make any contribution toward care costs from your savings or the value of their home. Anyone with assets of between £20,000 and £100,000 will be eligible for some means-tested support.
  • A new cap will be introduced, so that from October 2025, the maximum you’ll have to pay for personal care if you’re starting adult social care is £86,000 over your lifetime. Bear in mind that personal care essentially means residential care, nursing care and support, but it does not cover things like accommodation, food and energy bills.
  • A new means test for adult social care will come into effect in October 2025, so that if your total assets are over £100,000, you must cover care fees in full yourself. However, the new cap means that the maximum you’ll have to pay over your lifetime towards personal care costs will be £86,000. If by contributing towards care costs, the value of your remaining assets falls below £100,000, you’re likely to be eligible for some financial support.

What is the best way to pay for care?

At Rest Less we provide a variety of resources with advice on care and the different ways to fund it.

Our guide How to pay for long-term care explores some basic care funding options, while our articles Will I have to sell my home to pay care fees? and What is an immediate needs annuity? weigh up the pros and cons of some of the most common care funding choices. Meanwhile, Personal Independence Payment explained will take you through how the Personal Independence Payment (or PIP) works.

If you have more questions about care or are just looking to get familiar with it, our section on care support contains a multitude of articles covering care from both a financial and interpersonal perspective.

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