According to new analysis from Quilter, the wealth manager and financial adviser, retirees hoping for a comfortable retirement – together with enough money for care would need to build up an estimated £470,000 in retirement wealth.

Using the PLSA’s Retirement Living Standards definition of what constitutes a comfortable retirement, a single person would need to build up a pot of around £360,000, in addition to the state pension, to cover a comfortable retirement lasting from age 65 to 81.

However, the average length of care people require is a little over two years according to Bupa, and if that is factored into the cost of a comfortable retirement it increases to nearly £440,000 for residential care and £470,000 if requiring nursing care.

Prices during the cost-of-living crisis have pushed up the costs of care and projections show that someone hoping to self-fund a comfortable retirement as well as two years of nursing care needs an extra £85,000 compared to five years ago.

Following years of calls to produce a meaningful response to the social care crisis, the government unveiled a plan to introduce a £86,000 cap on how much an individual has to spend on care costs in their lifetime. The changes were meant to be introduced from October 2023 but are now not expected until October 2025, beyond the next general election.

The PLSA Retirement Living Standards sets an annual income in retirement of around £33,600 a year, which would cover all your needs, with some left over for fun. This includes being able to do a £59 weekly food shop, have three weeks’ holiday in Europe every year and be able to give £50 for each birthday present, among other lifestyle measures.

Free guide to care cost planning

If you have been told you need to meet long-term care costs yourself, or if you are arranging care for a friend or relative, you may not know where to start. It can be difficult to find clear guidance on your options, or on the state funding and benefits which may be available to you, particularly if you have intense or complex medical needs.

If so, a new “Basics of care fees planning guide” might be just what you need.

The free guide has been launched by the Age Action Alliance – the national later life collaborative network which has RetireEasy director Tony Watts OBE at its helm. The guide has been prepared with Centurion Chartered Financial Planners and aims to provide the facts you need to make an informed decision – including a “what if” scenario if the long-proposed care fee cap IS actually introduced.

You can download the guide by clicking here: http://theageactionalliance.org/2022/12/15/alliance-launches-free-guide-to-care-fees-planning/