Its study highlights the financial squeeze on the over-50s as around one in 20 also expect to have to help their own parents out if they need to pay for long-term care.
Government data shows the average man at 65 can expect to live 18.6 years while the average woman can expect to live 21.1 years. However healthy life expectancy for a man is 9.2 years and for a woman 9.7 years on average leaving the risk of needing some form of care (for the remaining years of later life).
The issue of long-term care was highlighted in the recent independent report, sponsored by MetLife, from Dr Ros Altmann CBE “Flexibility in Retirement – Planning for change” which highlighted the need for working longer and saving more to help financial planning for later life.
MetLife believes the Government’s planned reform of pensions due in April 2015 creates the framework for innovation which could include making it easier to save for long-term care.
Its research shows on average savers expect they will need around £67,000 to pay for long-term care – which is roughly in line with Government plans for a “care cap” – the maximum payable for social care - of £72,000 due in April 2016.
However 55% of over-50s have not thought about how much they will need or don’t know how much they will need to pay for care, the research shows.
Dominic Grinstead, Managing Director, MetLife UK, said:
“The Government pension reforms have created the conditions to enable consumers to adapt to the new retirement reality and the challenges of increasing longevity.
Long-term care is part of the new retirement reality and the research shows many are thinking how they can fund care if they need it.
Innovation in retirement income solutions will be needed as well to enable people to make the best possible use of the pension flexibility on offer.”
The research shows low levels of people expecting the State to bail them out – just 25% of the over-50s believe the Government will pay for long-term care. However just 7% have taken out insurance against the risks of needing long-term care and only 3% have put aside savings for the risk.
MetLife has supported the Budget pension overhaul by lowering its minimum initial investment to £30,000 to enable more customers to benefit from flexibility and certainty ahead of the new rules due in April 2015. From April 2015 customers will be able to take income when they want in line with planned legislation.
