HNWIs lack care preparations despite cost concerns

High net worth individuals (HNWI) in the UK are concerned about later-life care but are failing to prepare for it, Rathbones has warned.

It’s The New Retirement Reality report comes following the government announcement that it plans to reform the state pension triple lock from 2030 to help fund an expansion of social care provision.

Rathbones’ research of UK adults with £250,000 or more in investable assets found that 40 per cent ranked the cost of care among their three greatest retirement concerns.

However, just 12 per cent had made detailed plans to cover the costs, while 45 per cent admitted to not having meaningfully factored care into their retirement planning at all.

This lack of preparation was reflected in Rathbones’ Retire Well Index, a new behavioural benchmark that aims to measure how actively HNW households are preparing for retirement and later life.

It measures ‘real-world actions’, such as pension engagement, retirement planning, estate planning, care cost preparations, and responses to pensions being brought into the scope of inheritance tax.

Scoring affluent households from zero to 100, the average rating was just 44 out of 100, placing the typical respondent in the index’s ‘moderate’ preparedness band.

Rathbones noted that even respondents who described themselves as ‘extremely prepared’ only scored 50 out of 100 on average, which the firm said highlighted a significant gap between confidence and action.

“Care costs are the elephant in the room of retirement planning,” said Rathbones director of advice, supervision and oversight, Stephen Field.

“Many people tell us they worry about them, but far fewer are taking practical steps to prepare. That preparation gap is reflected in our Rathbones Retire Well Index - even among those who believe they are well prepared.

“With people living longer, but not necessarily healthier lives, more retirees are likely to face periods of ill health or care needs. Without a plan, money intended for travel, lifestyle goals and family could ultimately be used to fund care instead.”

Retirement anxiety remained widespread among HNWIs, according to the report.

Although 78 per cent felt they had a clear retirement funding plan, 75 per cent understood their pension entitlements, and 74 per cent believed they were on track for their desired retirement, 45 per cent still worried they had not saved enough.

Rathbones said the findings suggested that wealth did not eliminate uncertainty, and many households were grappling with questions around longevity, care costs, tax changes, income sustainability, and how to balance enjoying their wealth with supporting future generations.

Field added: "For many clients we speak to, their questions are: How long will my money last? How should I draw income from different assets? What happens if I need care? How do I support loved ones without compromising my own financial security?

“Even if they have enough money to retire, many people aren’t sure how long it will last.

“Having wealth and having confidence are not necessarily the same thing."

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