Almost two thirds of savers who raided pension funds have no plans for care

PENSION savers are plundering their retirement pots without planning ahead for the cost of any care they might need in old age

Three out of five people aged 55 or over who have taken money out of their savings

Three out of five people aged 55 or over who have taken money out of their savings under new pension freedoms have no idea how they would pay any care home bills or for help at home, according to research from Citizens Advice published today.

Just 16 per cent have budgeted for care costs they may face as they grow older while 23 per cent plan to use equity release or sell their homes.

Of those who have no plan, one in 10 is relying on
family or the State to pick up the bill.

Almost a third admit they have thought about the issue but have no strategy to pay any fees.

Gillian Guy, chief executive of Citizens Advice, said: “It’s unsurprising that many people in their 50s are not thinking about how they will pay for care costs when the need for this could be 10, 20 or even 30 years away.

“But this issue does need some attention, otherwise people risk dipping into their pension now only to find they need some of the money later.

“Getting the right guidance is key in helping people think about and plan how they will fund their retirement – including costs which are trickier to consider such as care fees.

There is also an opportunity for local authorities to help people plan ahead for future care costs

Gillian Guy, chief executive of Citizens Advice

"There is also an opportunity for local authorities to help people plan ahead for future care costs by providing clear information about how funding for care works and how much it costs.”

Currently around four million older people, nearly half of those aged over 65 in England, have care needs. Costs can include paying for help in the home or moving into a residential or nursing home.

The Conservative manifesto for last year’s election pledged that a cap of £72,000 would be placed on costs from April this year – with the State stepping in to pay any bills higher than that. Then the Department of Health announced that the measure would not be introduced until April 2020.

Under the current system anyone with assets of more than £23,250 has to pay the full cost of care. Research by Prestige Nursing + Care last week showed the annual cost of a care home went up £1,536 between 2015 and 2016 to £30,000 a year.

The plight of pensioners forced to sell their homes to pay the bills is set to worsen.
The Daily Express crusade Respect for the Elderly has called on the Government to do more to end the scandal.

However, if more people are taking their whole pension pot it could become increasingly unaffordable for the taxpayer, via the State, to pick up the bill.