Those aged over 55 who are looking to cover the cost of an average stay in a residential care home from income and savings could find themselves with a 26% shortfall, according to equity release trade body SHIP.
Its research suggests that it will cost £51,906 to cover the typical amount of time someone spends in a residential home (two years) but over that period the average over-55 would receive just £27,796 in income.
To cover this deficit, over-55s are likely to use their savings and investments (£10,468) but there is still a shortfall of £13,642 (26%) – even without factoring in costs for any specialist medical care.
These figures do not include basic living costs such as clothing, which SHIP says means that the average shortfall will be even greater when these are factored in.
While those in the North East (+£3,156) would find that they have some ‘surplus’ to pay for sundries, those in East Anglia (-£25,808) and London (-£24,013) would be significantly worse off.
SHIP says care home dwellers will either need to find alternative sources of funding such as equity release or turn to the council for assistance if their assets dip below £23,500.
Andrea Rozario, director general of SHIP, said: “There is a very real chance that over-55s might need to pay for some form of residential care as they get older