“Currently, many pre-retirees have little savings and carry the burden of significant debts just at a time when their incomes are about to fall,” it says.
A spokesman for the CII told the Telegraph: “A lot of people are going to have their assets depleted by parents’ long-term care costs or their own.”
The report says the average care home costs £26,000 per year and the average stay is two years, although a significant proportion of people stay for more than four.
That will rocket as people start to live longer. The proportion of very old people will grow the fastest, says the report, with the number of people over 90 expected to nearly treble over the next 20 years.
The CII insists the taxpayer will only be able to foot part of the bill.
An OECD report suggests pensioners currently only receive 30% of their former salary on average during retirement.
It believes that needs to rise to around 70% for people to enjoy a similar standard of living in retirement as when they were working.
The news comes after John Cridland, director general of the CBI, said charges for the government’s new low-cost pension scheme were too high.
The National Employment Savings Trust, where millions of the lower paid will be automatically enrolled, will charge the equivalent of 0.43% a year.
