The black hole of long-term care

The black hole of long-term care

Planning ahead for social care, as well as all the fun things in retirement, can give you confidence in looking forward to the future

Will I need any paid-for or long-term care in later life?

That’s the million-dollar question, and one that’s easy to avoid asking. Even if it seems light years away, paying for social care could leave a black hole in your finances. And it can make a big difference to the amount of money you can pass on to your family.
So it’s worth taking some time to check how your pension and retirement plans would cover such an eventuality.

How many older people need help with their care?

People have all sorts of care requirements. Of those over 65, the NHS estimates 24% of men and 28% of women need help with at least one daily living task. That’s around one in four. And over half of those over the age of eighty need some form of help or care.
These needs may be met by unpaid support (perhaps from family or friend) or by paid carers.

Care can take one giant bite into your savings

• If you’re paying for it yourself, the average weekly cost of residential care £1,266.
• The monthly average cost of residential care is £5,064.
• Residential care for a whole year costs on average £65,832.

Those are the average costs in the UK last year. The cost can vary by location and the services offered.
Paying for care doesn’t just impact the person receiving the care; For example, a family member might decide to give up work to care for a parent. And of course, the more money goes on paying for social care, the less your estate will be worth.

Could there be help on the horizon?

You may get some government-funded financial assistance to help pay care costs. But a lot will depend on your financial situation, and any entitlement you may have to help with costs is likely to involve various assessments and be subject to means testing.

Where can I get support and guidance?

There are several online resources available to help you understand what options are available and how to plan:

• The MoneyHelper service is backed by the government and offers free guidance on pensions and savings, as well as how you may be able to get support with care costs.
• Age UK offers a wide range of resources. From knowing where to start, what type of care and support you need and who pays for it, Age UK can help you through the process.
• For more specialist help in planning your finances, it might be a good idea to speak to a qualified financial adviser. They can help advise you based on your own circumstances. You can find an adviser regulated by the Financial Conduct Authority by going to unbiased.co.uk

So even if long-term care seems a long way off, it’s worth making it part of your thinking now. That way, hopefully it doesn’t have to be a huge issue.