Less than two-thirds (60%) of respondents who have accessed their pension since the pension freedoms were introduced in April 2015 have not thought about how they will pay for future care needs, according to research by Citizens Advice.
Its survey, which polled 501 British adults aged 55 or over who have accessed their defined contribution pension since April 2015, also found that just 16% of respondents have budgeted for care costs they may face as they get older.
The research also found:
- 23% of respondents have a back-up plan to cover future care costs, including equity release or selling their home.
- 10% of respondents would rely on others, such as family or the government, to cover future care costs
- 29% of respondents have thought about future care costs but have no plan about how to meet these.
Gillian Guy (pictured), chief executive at Citizens Advice, said: “Care costs can be a heavy financial burden that many people are unprepared for. It is unsurprising that many people in their 50s are not thinking about how they will pay for care costs when the need for this could be 10, 20 or even 30 years away. But this issue does need some attention, otherwise people risk dipping into their pension now only to find they need some of the money later on.
“Getting the right guidance is key in helping people think about and plan how they will fund retirement, including costs which are more tricky to consider, such as care fees."
