Ensuring that we get the care we need in old age is an important concern for many of us.
As more of us are living longer, the number of people requiring residential care is estimated to be over 1 million by 2040.
Care can be expensive, especially if nursing care is also required. This can mean using savings or even selling your home to meet costs.
New research by the Just Group has revealed that the cost of care has increased significantly more than the average property price over the last 4 years.
Since 2020/21 the average property in the UK has risen by around 12% but the cost of residential care has risen by 17%. They estimate that in the South-East of England the average home would fund residential care for seven years.
This increase in cost has made making sure you have a plan for later life care even more important than ever.
The local authority will offer financial support for those who need care, though under current rules anyone with capital over £23,250 will need to pay for care themselves. Previous plans to introduce a cap on the amount anyone would need to pay, expected to be around £86,000, have been shelved.
Many of our clients prefer to have the flexibility to choose the type of care that they want and at a residence of their choosing. Care can also be provided at your home, if suitable.
We can help clients build a plan to meet the costs of care in the future.
We use specialist cashflow software to demonstrate the impact of the cost of care on your finances in later life. We then provide recommendations on any changes required to meet your goals.
Our recommendations may include building up additional savings, investing more into the markets or earmarking a pension to access when required. There is also the option of a long-term care annuity which will pay directly to the care provider, ensuring minimal administration for you and your loved ones.
For many, the home may be their most valuable asset and selling this may be the most suitable way to meet the cost of care.
Many clients are also concerned about ensuring they can leave assets to loved ones when they die. We take this into account when preparing our recommendations.
In addition to raising the funds required, there can also be many legal issues around long-term care. This can include ensuring an appropriate Power of Attorney is in place or ensuring that loved ones can remain in a property you need to leave. We work closely with solicitors who are experienced in this area to ensure that you are in the best position.
If you have any concerns about how you will meet the potential cost of care in the future then please speak to your Financial Planner.
