Later life care and gender inequality

• Female life expectancy in the UK has increased by nearly seven years since 1980, meaning increasing numbers of women could need long-term care.

• This does not come cheap.

• Could acting now make you more financially prepared to meet these commitments?

If you remember 1980 well, you’ll recall a time that was in many ways similar to our own. Rising unemployment and a struggling economy were major concerns; there were angry and escalating tensions between the police and minority groups; and the Royal family provided a source of gossip and fascination.

But there are big differences too, not least in the average life expectancy of people in the UK, according to the latest figures from the Office for National Statistics. In 1980, average male life expectancy stood at 70.81 years, and that for women at 76.81. By 2018, those figures stood at 79.25 years and 82.93 years respectively

According to the Office for National Statistics, if you’re a 65-year old woman today you have a one in four chance of reaching 92, a ten percent chance of reaching 96 and a 2.9% chance of reaching 100. If you’re 50 those numbers are 93, 97 and 4.4%. Even back in 2014, Age UK recognised that later life funding is a growing crisis.

Put simply, the older someone becomes – male or female – the greater the likelihood they will need long-term care. According to NHS Digital, in 2018-2019, just nine in every 1,000 people aged 18 to 64 received long-term care, but this shoots up to 54 in 1,000 among those aged over 65. And more than half of those receiving long-term support were female.

What could that mean in hard terms?

The Government’s Money Advice Service (MAS) has some sobering figures. Using data from the UK Homecare Association, the MAS puts a figure of £14,000 a year on 14 hours’ care a week. If you need full-time care during the day, costs could be more than double this. And if you need carers to move in to support you around the clock, and if you have complex needs, it could cost about £83,200 per year.

The cost of a care home varies depending on your needs and where you live but currently the annual costs lie anywhere between £41,000 (for residential care) and £65,000 (for dementia care).

In 2011, the London School of Economics undertook a study for BUPA. It found that the average stay in a care home is just over 800 days, or two and a quarter years. A study in July 2020 by the US Department of Health and Human services found that 20% of the over 65s will need care for longer than five years.

Let’s assume, then, that you have in-home care for three years before moving to a care home for a further two years.

Even the lower MAS figure for care at home means a total of £42,000 over three years. Taking an average value for care home costs of £53,000 gives us a total of £106,000 over two years. In total you could be looking at funding costs of £148,000. These numbers are daunting. Taking this figure as a guide a woman aged 45, starting from scratch and assuming today’s historically low interest rates, would need to set aside £9,867 a year or about £820 a month to acquire a pot of this value by the time she were 60. Someone starting just five years older would need to set aside £14,800 a year or £1,233 a month to meet this same target.

Women at a disadvantage

But the trend of increased female longevity and the more likely need for long-term care threatens to collide with a separate phenomenon. According to Fidelity International’s July 2020 report Unlocking the Power of Financial Advice, women have less financial resources than men with which to meet the costs for such care.

A 2018 paper from Plymouth University business school showed that women are more likely to have taken a career break and generally make lower pension contributions, despite their longer life expectancies. In combination, it means women generally end up with a smaller retirement income to pay for living costs over a more extensive retirement.

The white-collar union Prospect has calculated that in 2017/18, the gap between men and women’s pension income was 39.9%. This could be worrying, given the cost of long-term care.

Is there help to pay for care fees?

Depending on your situation, local authorities may be able to help with paying for your care and have a legal obligation to do so if you qualify.

The first thing they will do is carry out an assessment of your care needs and check that they meet a nationally agreed set of criteria. If you qualify for help, they have a legal duty to provide or arrange the services you need. They will then carry out a financial assessment to work out if you should pay towards any services you need and how much you should contribute.

The NHS website has more information about the process of seeking help with paying for your care.

Read more: How would you fund your long-term care?

Are there any other options available?

If you face needing assistance with your day-to-day living, it might make sense to consider moving to a smaller or newer property. One that needs less upkeep and which might be better suited to your needs. For example, a bungalow or a purpose-built retirement home. Depending on the relative values of the properties in question, this could release equity to help towards paying for your care.

Downsizing – a phrase barely in use 30 years ago – has become an established trend. According to Age UK’s Later Life in the United Kingdom 2019 report, a third of older adults wanted to move from their present home although some found the process difficult emotionally, practically and financially.

Read more: Is downsizing always a perfect fit?

Conclusion

Preparing for later life may seem daunting, but it needn’t be. That women are living for longer is a wonderful thing to celebrate. “Old age” in the twenty-first century is not what it was for our grandparents. We are generally more active, have more choices in how we want to live our lives, and have better standards of living.

But it does mean that more of us are likely to need some support in our later years. Along with the gender pay gap and the gender pension gap, women are generally disproportionately affected when it comes to needing care and being able to finance it.