Three in five pension pot raiders have no plans for future care costs, research shows

Citizens Advice warns people who dip into their pension pot now may later discover they cannot afford future care costs.


Three in five people who have withdrawn money from retirement savings under new pension freedoms have no plans for how they would pay future care costs, according new research from Citizens Advice.

The findings, based on a ComRes survey of 501 adults aged 65 and over who accessed their pensions after April 2015, found just 16% have budgeted for care costs. While only 23% had given any thought to a possible ‘backup plan’, such as equity release or selling their home.

Of those who haven’t made a plan to cover future care costs, 10% would turn to family and friends or the government, 29% have thought about future care costs but don’t know how they would cover the costs, while a whopping 60% have given it no thought whatsoever.

The research also found 66% without a plan for future care costs are still in work, compared to 56% of people who have already retired.

With separate research by Prestige Nursing + Care revealing the annual cost of a care home has increased by £1,536 between 2015 and 2016, Citizens Advice warns people who dip in to their pension pot now may later discover they cannot afford to cover future care costs.

[contextly_sidebar id=”5CViXgQjwXQrghtaAYZyA9ljYTm2rckc”]However, Citizens Advice says many people don’t understand how the funding system for care works, and is calling on local authorities to offer online and face-to-face services to help people better understand the system. Councils could also refer people to these services when taking money from retirement savings, says Citizens Advice.

There are currently around 4 million older people aged 65 and over in England with care needs, which may include paying a home carer or moving into a residential or nursing home.

Gillian Guy, Chief Executive of 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 fifties 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.

“Getting the right guidance is key in helping people think about and plan how they will fund their retirement – including costs which are more tricky to consider, such as care fees.

“There is also an opportunity for local authorities to help people plan ahead for future care costs, by providing clear information about how funding for care works and how much it costs.”

The charity will be publishing its full findings in a report later this week.


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  • StephenH

    The use of the term “pension pot raiders” is more than a little pejorative when it is being used to describe people who are simply accessing their own money.

    • I apologise for that, but it’s difficult to choose a headline short enough to fit in a tweet and which still attracts the highest possible clicks. It was not meant to be derogatory in any way.

      • StephenH

        Your apology would carry considerably more weight if you had also edited your headline to something more appropriate.