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More than 80,000 elderly people paying for private care at home or in residential homes run out of money each year and have to turn to local authorities for funding, according to Key Retirement Solutions (KRS).

The group, which has launched a domiciliary care fees planning service with live-in care specialists Helping Hands, estimates one in four pensioners paying for care have to turn to local authorities. 

KRS warned this can “dramatically” affect the levels of care received as well as potentially how and where that care is provided.

The funding squeeze applies to the estimated 165,000 paying for their own care in residential homes and around 180,000 paying for care in their own home.

Research from Key Retirement Solutions shows that 84 per cent of those aged 65 plus, if requiring long-term care, would choose to have care at home, but too few seek out guidance and advice on how best to fund their care for the short and long term.

The findings also revealed few were able to afford the £35,000 cap on individual contributions to care costs proposed by the Dilnot Commission on Funding of Care and Support.

Just one in five of those aged 65 plus believed they could pay the £35,000 and just 2 per cent have made financial preparations for the eventuality of suffering ill-health in retirement, the research showed.

Dean Mirfin, group director of KRS, claimed elderly people wanted to remain in their own homes when they needed care and they want the best standard of care possible but this is “clearly not happening” as people are running out of money and the cost to local authorities at a time when budgets are squeezed is potentially more than £2bn a year. 

He said: “Careful planning at the outset cannot conjure up money but it can help people know what their options are and what they can achieve. 

“We also want to address the needs of those who ‘top up’ their care costs privately to provide extra care at home above that provided by the local authority.”

The opinions expressed do not constitute investment advice and specialist advice should be sought about your specific circumstances.

Published on our website on October 20, 2011