Calls are being made for "urgent action" after a new study reveals just how much residential care could cost.
New research from Royal London has shown that the average person in residential care could see up to 50% of the value of their home swallowed up by care costs.
Differing house prices across the UK mean this figure varies from 18% to 56%, with people in the North being worst affected due to lower house prices.
For example, the average house price in the North East of England is just under £129,000, and the stay in a residential home (30 months) costs £554 per week, which would eat up 56% of their property value.
Alternatively, London residents would only spend 18%, with an average house price of £484,000 and costs of a 30-month stay in a care home totalling £666 per week.
The amount of time someone stays in a residential home varies from person to person, but for residents with the longest stays, the final bill could in fact exceed the value of the average home in many parts of the UK.
Steve Webb, director of policy at Royal London, is calling on the government to take "urgent action".
He said: “Successive governments have failed to grasp the nettle when it comes to care costs. For over twenty years we have had a series of Royal Commissions, expert reports and policy papers, but little has changed.
"With an ageing population, more and more of us will have loved ones needing long-term care, and we could see a large part of the value of our family home taken up in care costs. The government’s plans for yet another discussion document on social care later this year are far too slow. We need urgent action to address this funding challenge”.
Debbie Kennedy, head of protection at Royal London added: “These figures are a shocking reminder of the huge costs which growing numbers of us will face if we need residential care later in life. Even an average stay in a care home can eat up half the value of your home, depending where you live in the country. The whole system is a lottery and we need to find better ways of supporting people to cope with these large and unpredictable bills”.
This news coincided with a BBC report which revealed that 95 UK councils have lost contracts with care firms, who say they cannot make ends meet.
The BBC Panorama investigation found that firms reported they were unable to recruit or retain the staff they needed, and they simply were not being paid enough to provide adequate care and pay staff a living wage.
Research carried out for Panorama by Opus Restructuring and Company Watch revealed that 69 home care companies have closed in the last three months and a quarter of the UK home care companies is at risk of insolvency.