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The Actuary The magazine of the Institute & Faculty of Actuaries

Public unaware of real cost of long-term care

The CII has found that 80% of the public is unaware of how much they will have to pay for care, and that provisions to meet these costs are not being made.

The report, 'Who Cares?', has also shown that the current average long-term care bill is £26,000 per annum, with an average length of stay approaching two years. Furthermore, the current average pension provides an income of only £10,000 each year, which leaves a vast deficit that needs to be made up with personal provisions.

David Thomson, director of policy and public affairs, CII, said: "There is clearly a massive disconnect between public perception and reality. 80% of the public have no idea of how much their long-term care will cost and consequently are unlikely to be making any provision to meet that cost. Even more worrying is that 50% of the public think long-term care is entirely free at the point of use. The reality is starkly different.

“Our research shows MPs have very little appetite for a model that is fully funded by the state, 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.

“This problem needs to be addressed through measures to increase public awareness and by reinforcing public confidence in any new financial services market that might develop. Above all, there needs to be rigorous debate of the proposals set out by Dilnot.”