People in the UK are underestimating the cost of elderly care by a collective sum of £7bn each year, according to new research.

A Scottish Widows study shows that, on average, UK adults think residential care willcost £549 per week – some £317 short of the actual average weekly cost of £866.

The poll of 2,000 adults found that 42% of people have £2,000 in life-savings, which is only enough to cover a place in a nursing home for a maximum of two-and-a-half weeks. In the survey, conducted by Scottish Widows' own think tank the Centre for the Modern Family, one in four people claimed they would need or expect to rely on state support to fund their care when they are older.

Two in five admit they don’t understand the benefits they are entitled to. 

The number of people in care will almost double by 2035

Jane Curtis, chair of Centre for the Modern Family
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Jane Curtis, chair of the Centre for the Modern Family, said: “The number of people in care in the UK will almost double by 2035. Our research shows that an over-reliance on relatives and the state could put families in serious financial difficulty.

“As for state provision, it’s clear that many people simply don’t understand the social care benefits and support system. Providing clarity and raising awareness of what is and isn’t available is critical to helping people prepare for the longer-term future.”

If your capital is equal to or less than £14,250 your care will be fully subsidised by your local council.

Case studies published by Age UK reveal a number of occasions where families have been forced to pay ‘top ups’ while in the care of state-funded residential homes.

Top ups provide additional facilities with the informed consent of the service user.

Caroline Abrahams, charity director at Age UK, said: “In some cases families are being asked to pay a lot more than they can afford.

“In today’s cash-strapped care system we fear that ‘third party top ups’ are increasingly a form of ‘stealth tax’ on families, unfairly exploiting their desire to do right by their loved ones if they need to move into a care home. 

“This is hugely unfair and it’s yet another reason why the Government must live up to its commitment to consult on new proposals on social care, later this year.” 

This year Age UK received more than 250 calls from families complaining about the demand for extra fees that should have been subsidised by their local council.