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Ill-prepared for long-term ills

At least two million older Britons have no financial plans for their long-term care, new research from Fidelity indicates.

With the average person ill for six years in their retirement, one in six Britons can expect to end up in a nursing home but few are prepared for the cost of long-term medical treatment.

Fidelity estimates that two million 55 to 75-year-olds could save for their old age but are failing to do so.

More are known to have ignored the recommendation to take out health insurance.

Simon Fraser, president of institutional business at Fidelity International, warned: "Longer lives can mean more time in retirement but also more time in poor health – a message that sadly does not seem to be getting through.

"A significant chunk of a generation, those on the cusp of retirement, could spend their retirement in both poverty and ill health.

Of the quarter of Britons that are saving for possible long-term care expenses, one in three will only have reserves of £25,000 or less, even though a year's stay in a nursing home costs an average of £21,000.

Mr Fraser added: "If people want enough money to live on in retirement and pay for the things that really count – like spending twilight years in comfort and dignity let alone passing money onto to their children – they need to start saving regularly and in a wide basket of savings and investments."

For health costs, click here to see how much you could borrow with Lombard Direct.

19/12/2006 14:53:01

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