A cap on the cost of residential care will help few pensioners and those that do hit the trigger are likely to have already spent around £140,000 on being looked after, research has found.
Elderly people expecting the changes to help cover their bill are "in for a shock" because just 8% of men and 15% of women entering care aged 85 are expected to reach the £72,000 limit that is being introduced in 2016, according to the Institute and Faculty of Actuaries (IFoA).
The Government's cap does not cover accommodation and living expenses, and care costs only count towards the limit at the rate the local council would pay for a place in a residential home.
According to the IFoA study, pensioners will have spent £140,000 on care costs on average before reaching the cap and that bill could reach £250,000 if an individual is in care for 10 years.
It calls for the Government to introduce tax breaks to encourage people to save for future costs and recommends the creation of a Pension Care Fund (PCF), a ring-fenced long-term care savings pot.
The savings system would mirror pensions in terms of taxation and any money that was not used could be passed on to pay the costs of a spouse or other relative being looked after without being hit by inheritance tax, the IFoA's How Pensions Can Help Meet Consumer Needs Under The New Social Care Regime report said.
Thomas Kenny, one of the authors, said: " Recent research data shows that one in three women and one in four men aged 65 today is likely to need care. Yet the average disposable income for retired households was £18,700 in 2011/12, which is below the level required to fund the average long term care costs before reaching the cap.
"Anyone who is expecting that the cap will pay for care is in for a shock. The cap is there to protect against catastrophic care costs and we estimate that few people entering care aged 85 years will reach it.
"Second to property, pensions are the largest wealth asset for most people. Pensions are largely understood, there is an existing savings framework for them and, with the right tax incentives and flexibility, there are products that could help people to meet any care needs that they may have in the future.
"However, we also found that there is no silver bullet - no one product that would suit everyone's personal circumstances to help them meet care costs. In the report we consider a number of existing and new products which, with the right tax incentives, could help people plan ahead, including a new pension care fund."
A Department of Health spokesman said: " The current system for paying for care is completely unfair - people with more than £23,250 are literally on their own and many have to sell their homes in a time of crisis to pay for the care they need. Our reforms will mean more people get financial help sooner and keep more of their assets.
"We are introducing the first ever cap on care which will protect people from catastrophic care costs and deferred payments so no-one should be forced to sell their home in their lifetime to pay for care. On top of this we have increased the means testing level so that Government help kicks in far earlier than before, meaning two thirds of people who reach the cap will pay less than £72,000."