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Public still in denial over cost of long-term care

Public still in denial over cost of long-term care

Category: Pensions

Updated: 22/11/2011
First Published: 16/09/2011

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The public continues to remain unaware of the real cost of long-term care and the necessity to make personal provision to meet the cost, it has been warned.

Despite the recent work of the Dilnot Commission, an independent body tasked by the Government with reviewing the funding system for care and support in England , the Chartered Insurance Institute (CII) said the public remains largely oblivious to the significant costs of long-term care.

With the current average long-term care bill amounting to £26,000 per annum and the average length of stay in a care home being two years, the average care bill comes to a grand total of £52,000.

But, as the CII points out, the current average pension provides an income of only £10,000 per annum, which leaves a huge annual deficit that would need to be filled.

When questioned, four in five people admitted to having no idea of how much their long-term care will cost, and are therefore assumed unlikely to make any provision to meet that cost.

But perhaps of even greater concern is the half of people who believe long-term care is entirely free at the point of use.

"There is clearly a massive disconnect between public perception and reality," said David Thomson, director of policy and public affairs at the CII.

"Our research shows MPs have very little appetite for a model that is fully funded by the state, with over 50% preferring instead a partnership model similar to that outlined by the Dilnot Commission.

"Yet even with a model as outlined by the Dilnot Commission the funding deficit still remains significant, meaning people will have to consider using capital tied up in non-pension assets such as property."

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