We are all living longer and there is a good chance we will have to fund longterm care at some point. How do you plan to pay for it...? Kathryn Gaw looks at the options

ONE hundred years ago, the average life expectancy for a British male was 51, and 55 for females.

Now, men and women are expected to live well into their eighties, while recent data from the Association of British Insurers (ABI) predicts that the babies born today will live to an average age of 100. By 2100, ABI says, the average life expectancy will be 125.

Of course, the Government has duly responded by raising the age of retirement and shining a spotlight on pension planning through the introduction of auto-enrolment.

But there is still a huge amount of uncertainty around provisions for longterm care.

According to Age UK, there are now more people in the UK aged over 60 than there are under 18, and more than 1.4 million are aged 85 or over.

Old age is something we will all have to deal with, but we are woefully underprepared.

Private vs public: SO what is your plan for funding your old age?

Your local authority will offer some support on a means-tested basis, but a series of care home scandals has done nothing to endear the public to this option.

Private care homes cost about £30,000 a year (although this will rise depending on the level of care required), meaning that many elderly people will be forced to cash in their savings or sell their homes to meet costs.

However, the global financial crisis has decimated the property market, with homes in some areas losing up to 50 per cent of their value.

A recent survey by the Saga Equity Release Advice Service found that a million over- 50s will not be able to pay off their interest-only mortgages, so selling your house may not be a feasible option for some people.

Anyway, by relying on your home or savings to cover your care, you are essentially forcing yourself to estimate your own life span.

If you have a nest egg of £90,000, you are essentially budgeting to live for three years after requiring care.

This is a depressing calculation to make, and calls into question the role of the state in addressing the long-term problem of long-term care.

In his 2013 Budget, Chancellor George Osborne announced a £72,000 cap on care costs from 2016 onwards. This is definitely progress, but more needs to be done.

No British insurers offer policies covering long-term care, and even your investment portfolio holds no income guarantees.

And then there is the issue of space – where are all these care homes supposed to be built?

It’s not a pleasant topic, but it needs to be addressed.

As the population rises, and ages, long-term care will become the ticking time bomb of our generation.