A recent study by NFU Mutual found that one in seven people in the UK are clinging to the hope of inheriting property or cash. The reality is that 75% of people whose parents go into care lose most of their inheritance.
This is because a quarter of those in care pay for the care by selling their property, with one million homes sold in the past five years to this alone.
More than two million elderly people have also had to use their savings to fund care.
The research also highlighted a “naivety regarding the cost of care and a lack of inheritance tax planning”.
A third of the people surveyed said their parents had made no plans for the impact of old age care on their estates and a similar number admitted they failed to factor this cost into their own planning.
And the gap in retirement provision is set to worsen as Councils tighten budgets for elderly residential care.
Freedom of Information data collected as part of the study showed that more than half of Councils have slashed their care budgets over the last five years or reduced actual spending, suggesting a tightening of purse strings when it comes to old age care.
Whilst there is no simple or straightforward solution to avoid care costs, careful and prudent planning can help protect a family’s wealth should residential care be needed or a loved one die.
It is essential to seek professional advice to make sure no one pays more tax than they need to and wealth is ring-fenced where appropriate.