Cost of elderly and long term care set to double by 2050: Report

By Dr. Ananya Mandal, MDMay 24 2011

A report from the Organization for Economic Co–operation and Development (OECD) has shown that long term care costs are set to double by 2050 thanks to an ageing population. It shows that even those on above–average incomes could spend 60% of their disposable income on care costs. By 2050, the UK will spend more than a fifth of its entire national output on services for the elderly.

The report revealed that one in five people will need long–term care of the most expensive kind in the last years of their life, while half will need some sort of care, according to Saga. Yet “no–one has put anything aside for it,” says Ros Altmann, Saga's director general. The government does provide some financial assistance, although its restrictions mean the majority of people are unlikely to receive much state help. Current rules state that anyone with assets (including property) over £23,250 in England, £22,000 in Wales or £22,770 in Scotland will have to pay their own long–term care costs.

“In the UK, with the exception of a couple of cash benefits for the disabled, funding for long term care is really only for the very poor,” says Francesca Colombo, senior health analyst for the OECD. She added, “The big difference between the UK and other OECD countries is that many other countries are now moving towards a universal system…It puts the UK closer in situation to the US where long–term care is like a safety net for those who really can't afford anything.”

The OECD is urging the government for more financial assistance but given its stretched resources, individuals will still carry much of the burden. Public spending on care for the elderly accounts for just 0.8% of the UK's gross domestic product (GDP) compared to 3.6% in the Netherlands and 3.5% in Sweden.

Of the 28 OECD countries in the research, only Malta and Spain will be spending a higher proportion of national income on long-term care. The OECD report, which will be released this week, added, “Future generations may be less willing and able to pay continually rising taxes to support a growing share of economically inactive people.”