One in four retirees will need care

One in four people in retirement will require care in their old age, new research has shown.

That is according to Saga, which believes that the fact people are living longer means the money they put aside for retirement is not enough to cover the costs of care.

Dr Ros Altmann, Director-General of the organisation, advised people approaching retirement to consider certain investments.

She said: "There are potential solutions that can be introduced.

"Equity release is inevitable, since most people will probably have to access some of the value of their property."

Ways people can combat the risk of care fees is by designating an annual pension-style allowance with a Care ISA.

Dr Altmann also suggested the government incentivise employer care plans with proper tax relief or by adapting annuity rules to allow pensions to be used to pay for care pension annuities.

She said these could be done with a lower starting income but which would then provide much larger sums in later life.

Posted by Liam Tomlinson