The total cost of long term care for the
elderly in the UK is forecast to rise from £21.8bn ($35.2bn) now to
£37.9bn by 2025 – a rise of 73.9% – according to a report released
by financial mutual LV=.
The Future of Long Term Care report
said that as life expectancy in the UK increases, the number of
people needing to make use of formal long term care services will
grow from 840,184 today to 1.1m by 2025 – an increase of 37%.
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LV= said the average cost for long term care
is currently estimated at £26,000 per year. However, the Future of
Long Term Care report predicts this will increase by 2.3% by the
year 2015.
Thereafter, with a projection of a cost
increase of more than 10% per year, the price of a year’s long term
care per person could rise to more than £33,000 by the year 2025,
said the report. This does not include the effects of inflation
that would increase this figure further.
Cost factors
According to the report, major reasons behind
the rising cost of long term care in the future include women
working later in life when they traditionally would have provided
care; and families increasingly living further apart, thereby
lessening the option of care within the family.
It said the most significant reason for rising
costs is the UK’s rapidly increasing elderly population, which
exerts pressure on the care services infrastructure.
Vanessa Owen, head of equity release at LV=,
said: “The UK is facing an uncertain future on the funding of long
term care. Low interest rates and living costs continually on the
up, coupled with social care budgets being cut, creates a worrying
financial backdrop for many, especially those in retirement.”
