As a result of Boris’s change in the cap, Britons will need to find an extra £150,000 to fund their care.
A PENSION WARNING has been issued to Britons, many of whom will be forced to pay extra money to cover care costs as a result of a major social care reform.
According to new research, people’s pension savings will need to be significantly higher if they want to live comfortably in their later years.
The findings coincide with Prime Minister Boris Johnson’s introduction of an £86,000 cap on the cost of care.
When it comes to the cost of care for Britons, however, things may not be as they appear.
This is because MPs approved a change yesterday that exempts means-tested aid from the cap.
The proposals used to take into account government support as well as individual contributions, but that is no longer the case.
It may mean that less well-off retirees will have to rely on their own assets as a primary source of funding for their care.
Some Britons are concerned that the decision will lead to a financial crisis.
It is likely to have a significant impact on a person’s retirement, potentially leaving them poorer and in more debt – with some even fearful of having to sell their home to pay for their care.
The Prime Minister, on the other hand, has stated that the proposals are more generous than the current system.
When looking at an average from Carehomes.co.uk, the average care home stay will last 801 days and cost £101,613.
The cap will become effective in October 2023, when an £86,000 limit will be imposed.
It’s worth noting that the cap excludes living expenses like food, lodging, and utility bills.
It is estimated that retiring at 65 will cost £339,654 in order to live comfortably.
Quilter’s research for The Telegraph found that when care costs are factored in, a comfortable retirement costs £425,654.
According to the same study, a 25-year-old earning an average of £22,437 who contributes to their workplace pension will only save £276,354 by the time they reach 65.
This equates to a £150,000 shortfall in the funds required for retirement and long-term care expenses.
It’s easy to see why people across the country are concerned about the effects of later life care.
The Bill will now go to the House of Lords for consideration.
“Brinkwire News Summary.”