The baby-boom generation is confused and badly prepared for the financial realities of retirement, according to a report published yesterday. Help the Aged said that the Government’s complicated and unfair benefits system, combined with an overly care-free attitude to old age, meant that many people were not receiving the assistance and advice they needed to avoid poverty.

Nearly two thirds of 924 people surveyed by the charity had made no plans to fund their care in old age, while 20 per cent said that life was too short to worry about such possibilities.

Almost half (46 per cent) said that they would sell their homes if necessary and 56 per cent expected their savings to cover the costs of a care home despite the fact that they had made no such financial arrangements.

One in five said that they would rely on relatives to cover the bills and 55 per cent thought that their basic state pension, currently £84 per week, would help to cover the £400-per-week average cost of living in a care home. Nearly half expected the Government to contribute to care costs later in life, and 10 per cent of those aged 61 to 65 thought that the state would pay for all their future needs.

Help the Aged said that the Government’s complicated care system was the main reason for the confusion.

It said that there was now a “postcode lottery,” with the state providing different levels of care depending on where a person lived. The charity’s report was published three days before the Government’s consultation on NHS-funded “continuing care” comes to an end.

This year it emerged that more than 5,000 elderly people — one in five residents of NHS nursing homes — were being denied the free care to which they were entitled.

Compensation has since been paid to those who had spent thousands of pounds on care that should have been met by the NHS.

Jonathan Ellis, Help the Aged’s senior policy manager, said: “This research highlights the worrying extent of confusion among people who are at an age when they should be planning ahead, or at least thinking about what future care needs they may have.

“The Government’s current complex system has added to this, succeeding only in fuelling widespread uncertainty about where the state’s responsibility stops and the individual’s begins.” Mr Ellis said that care was a fact of life for one in five older people. “Views held by society that ageing is something that should be feared are perpetuated even further by a care funding system that no one can understand,” he said.

“It is apparent that the public have been led into a false sense of security about what is, and what is not, available to help them if they have care needs.”

Help the Aged called for an end to the “complex and undignified” means-testing system that is said to force many elderly people to sell their homes.

The charity said that it wanted the upper savings limit after which a person pays the full cost of care to be increased from the current level of £21,000, which includes the value of a person’s home.

According to the report, 65 per cent of respondents would be happy to pay more income tax to help to fund pensioners’ care needs.