The pension crisis alone was bad enough.
With millions of people in this country not being able to retire with any sort of financial provision. A pension pot of £100,000 today will only buy you an annuity of around £5,000 per year or £416 a month! What’s terrifying is this figure is only going to get worse as life expectancy rates rise. I have talked about the pension crisis at length already so I won’t cover it in any more detail here, however, if you want more information, head over to our pension crisis page.
The Pension Crisis and the Care Homes Crisis combined are creating a perfect storm.
One so bad that we are creating a nation of ostriches; we are all burying our heads in the sand. Unfortunately this storm is not going away.
So how does the care homes crisis affect the pension crisis?
Hopefully you will not need care straight from retirement but for most people, care costs are something they should take into consideration when planning for their retirement.
Those who need to access care home support will find that all of their assets above £23,250 (including the value of their home) will be taken into consideration and utilised to fund care packages before the local authority will consider paying any care home fees. The average package of care in a home costs around £36,000 a year in the UK and is rising.
It will be very interesting to see how the government handles this crisis as they can’t afford to keep paying out for care. In 2008 there were 4.8m people aged 75 and over in Britain. In 2028 this is expected to rise to 7.9 million people.
This makes somber reading and it should do as the problem is huge. We are going to have millions of pensioners living on the breadline and it will come as a culture shock to many as this is not just a crisis for the poor. The vast majority of the middle classes in the UK have woefully inadequate pension provisions. They will go from choosing whether they should have a family holiday in Florida or Spain this year to should we heat the home or buy food!
Inheritance tax will no longer be a problem as most people won’t have anything to pass on to future generations.
Scared? You should be, hopefully enough to get your head out of the sand long enough to take action.