New research shows the average ISA is worth around £24,035 in the UK, while the average stay of care for those entering a residential home is two and a half years.

For those in the North East, an average ISA value of £19,915 would pay for only 35 weeks worth of care.

The situation is only slightly better in the North West, where an average ISA size of £21,560 would get you 41 weeks worth of care.

While in the capital, the ISA value is among the highest at £25,982 – care costs in London mean the money would only cover 36 weeks.

Stephen Lowe, group communications director at Just Group, who conducted the research, said: “ISAs have been a popular way for people to save tax efficiently for nearly 20 years but even over that timescale, the average holder has not built up enough to pay for even a single year of care.”

“ISAs will only scratch the surface of the problem of how to pay for care, compared to using the wealth tied up in property which is far larger and more widely spread.

“Only about four in 10 of the adult population has an IDA, falling to three in 10 in Northern Ireland.

“Fewer than 20 estates are taxed on death so the appeal of a tax break is limited.

“While most people have relatively modest care costs, the biggest problem is the minority who end up needing care for many years but cannot hope to save the six-figure sums to pay for it themselves.”

The new research comes after reports suggest the Government is considering a Care ISA that is exempt for inheritance tax.

Read More  The innovative Finance ISA: Don't waste your savings with a bank

This would avoid the ISA being taxed when the holder dies, leaving heirs free from the dreaded ‘death tax’.

Mr Lowe added: “Government proposals would be better focusing in the short-term on how to incentivise young people aged 50 plus to use some of the many trillions tied up in their properties to support their later life care costs and focus long-term policy development on establishing solutions to pool risk so people can be protected from catastrophic care costs that destroy their life savings.”

As seen on
Daily Express :: Finance Feed

LEAVE A REPLY

Please enter your comment!
Please enter your name here