Paying for Old Age: Can People on Lower Incomes Afford Domiciliary Care Costs?

The Labour government has made it clear that it will not countenance major changes in the financing of long-term care for older people in England and Wales. One consequence is that people on modest retirement incomes will continue to have to pay for elements of their care in their own homes. The government also implicitly assumes that people of working age, on average and below average earnings, are expected to save in order to pay for long-term care. However, evidence about individuals' willingness and ability to save and to pay for long-term care is scanty. Accordingly, an interview survey of 100 people-today's and tomorrow's pensioners-was undertaken in June and July 2000. They were asked detailed questions about their financial circumstances, and about their ability to pay more towards their own health and social care costs, now and in the future. The results suggest that today's pensioners on average and lower incomes are experiencing difficulties in paying for care services in their own homes. Tomorrow's pensioners who are currently on average and lower incomes will struggle to pay for care services in their own homes. The results also support the view that people tend to overestimate their retirement incomes and do not understand how long-term care is financed. They think that the government can and should pay for long-term care.