It’s clear to anybody that Britain’s rapidly-ageing population leaves the country sitting on an economic timebomb. Concerns over the future of the State Pension tend to dominate the headlines, and this has been particularly so in recent weeks following one ex-minister even calling for the government to raise the age at which citizens can claim it to 75 years.
There’s a range of other essential benefits for retirees might be going on the block too, along with the guarantee of decent annual pension hikes. But there’s another serious financial concern that many of us overlook, one which is already having a catastrophic effect on hundreds of thousands of Britons: the colossal cost of care in old age.
Homes for sale
Indeed, a recent study conducted by charity Independent Age perfectly illustrated the extent of the crisis. The research showed that, since 2000, a whopping 330,000 older citizens have had to sell their homes to pay for care costs like “help with washing, getting dressed and going to the toilet.”
The report suggests that the problem has worsened considerably in recent years. It notes that 42,000 elderly people have had to sell their properties to fund care just since the 2017 general election.
These numbers shouldn’t come a shock when you consider the rate at which these costs have ballooned since the turn of the millennium. According to Independent Age, the average cost for residential care in the UK surged 93% between 1998 and 2018, to £622 per week from £322 previously. By comparison, pensioner net income (ex housing costs) has risen by a far more modest 50% to £445 per week from £296 before.
Take action
It’s no surprise that the charity has called for a silver bullet — in other words the introduction of free personal care for everyone aged 65 years and above — to solve the crisis. Whether or not you agree with its demands, however, the chances of this actually happening range from slim to none.
Government is already struggling to meet the demands of its ageing populace and, as I’ve explained above, the push is to reduce the financial burden of the UK’s older citizens, not increase it. And so the burden is on us as individuals to build enough capital to generate a decent level of income and cover those extraordinary costs in the years ahead.
The good news, however, is that sensible investing can put you on the path to avoiding pensioner poverty and/or having to sell your assets. Even if you’re near retirement age there are still ways to make decent money from stocks, and there’s a wealth of information out there from the likes of The Motley Fool to help you do just that. It’s been proven that average annual returns from share investing range between 8% and 10% over a long-term horizon (10 years or longer), and so with the right approach you can make some decent money and avoid the trap of poverty in retirement.
