Pensions Planning: The NUMBER

moving_forward

Wow I have just completed this thread from start to end. It's took some reading but well worth it. Thank you to the OP and all contributors who have certainly given thought to our number. We are currently paying down debt but think we will need in the region of £25k to £30k in today's money. It could be 20 years away depending on getting our finances in order and starting to pay more into DC pensions. But at 45/47 we have time to improve.

kev2009

@moving_forward I think that's about where I am aiming for and have a similar time frame albeit would like to get out early 60s if possible but will be a few years before I am in a position to make any additional contributions to pension, just hoping it wont be too late!

Kev

moving_forward

@kev2009 yes we would love to make a run for it early 60's if the future allows. Fingers crossed eh 🤑

SomeMadeUpName

DairyQueen said:

I think it would be appropriate to offer tax advantages for drawdown if required to cover care fees. 

Not just drawdown.  IMO care home fees (upto a max of circa £1,000 pw, to prevent 'luxury' spending) should be an entirely tax deductible expenditure.

DairyQueen

SomeMadeUpName said:

DairyQueen said:

I think it would be appropriate to offer tax advantages for drawdown if required to cover care fees. 

Not just drawdown.  IMO care home fees (upto a max of circa £1,000 pw, to prevent 'luxury' spending) should be an entirely tax deductible expenditure.

Or, at least the 'care' component. It's reasonable to foot the bill from taxed income for the 'living costs' component (per the rest of society), but it's adding insult to injury to have to drawdown at a higher rate, and pay extra tax, in order to pay the unwelcome cost of care in one's final years. 'Dementia tax' indeed.

PJM_62

Anyone seen any figures for the average total care home costs, before death ?

Obviously most people don't end up in a care home.
But for those that do, I cant imagine the average time spent in the home is more than a couple years.

Linton

PJM_62 said:

Anyone seen any figures for the average total care home costs, before death ?

Obviously most people don't end up in a care home.
But for those that do, I cant imagine the average time spent in the home is more than a couple years.

https://helpandadvice.co.uk/care-home-costs/

AVerage cost - £34K/year. 

https://eprints.lse.ac.uk/33895/1/dp2769.pdf

Mean stay - 2.5 years
Median stay - 1.6 years

The difference is because a few people stay for a large number of years.

DairyQueen

PJM_62 said:

Anyone seen any figures for the average total care home costs, before death ?

Obviously most people don't end up in a care home.
But for those that do, I cant imagine the average time spent in the home is more than a couple years.

It's postcode dependent. Also, depends on the quality of the home. Anywhere between 500 and 700 pw for residential care and 800-1000 for nursing care, and it's rising beyond inflation every year. Note that self-payers often subsidise those receiving LA support as the latter don't always pay the full cost of care. The homes must make-up the shortfall somehow.

Average stay is 2 years but that's the mean. For a minority (like my cousin's MIL, who lived to the grand age of 97) it could be a decade.

My MIL paid £42k p.a. for an exceptionally good residential home in Hertfordshire. She was on their waiting list for 7 months before spending 2 years and 1 month in their care. She died in late 2019, a blessing as she missed the dreaded pandemic.

Bottom line is that longevity = some kind of support required. Absent a supportive family in the locality, the chances are pretty high that those who are single/widowed will face these onerous costs. 

Having seen the fate of the generations above me I'm not convinced that living beyond good health is worth the extra innings.

SouthCoastBoy

DairyQueen said:

PJM_62 said:

Anyone seen any figures for the average total care home costs, before death ?

Obviously most people don't end up in a care home.
But for those that do, I cant imagine the average time spent in the home is more than a couple years.

It's postcode dependent. Also, depends on the quality of the home. Anywhere between 500 and 700 pw for residential care and 800-1000 for nursing care, and it's rising beyond inflation every year. Note that self-payers often subsidise those receiving LA support as the latter don't always pay the full cost of care. The homes must make-up the shortfall somehow.

Average stay is 2 years but that's the mean. For a minority (like my cousin's MIL, who lived to the grand age of 97) it could be a decade.

My MIL paid £42k p.a. for an exceptionally good residential home in Hertfordshire. She was on their waiting list for 7 months before spending 2 years and 1 month in their care. She died in late 2019, a blessing as she missed the dreaded pandemic.

Bottom line is that longevity = some kind of support required. Absent a supportive family in the locality, the chances are pretty high that those who are single/widowed will face these onerous costs. 

Having seen the fate of the generations above me I'm not convinced that living beyond good health is worth the extra innings.

Where I live, nursing care can be > £1000 per week, when we looked for my mum about 18 months ago, I would say the average was around £1000 per week, the most expensive about £1200 per week

hugheskevi

Linton said:

PJM_62 said:

Anyone seen any figures for the average total care home costs, before death ?

Obviously most people don't end up in a care home.
But for those that do, I cant imagine the average time spent in the home is more than a couple years.

https://helpandadvice.co.uk/care-home-costs/

AVerage cost - £34K/year. 

https://eprints.lse.ac.uk/33895/1/dp2769.pdf

Mean stay - 2.5 years
Median stay - 1.6 years

The difference is because a few people stay for a large number of years.

Interesting to note that the mean length of stay in residential care for males is only around 60-65% of the length of stay of females.

Looking at some rather dated ONS statistics, only 23% of care home residents were male, and unsurprisingly, most care home residents were aged over 75.

Personally we plan to move downshift to a more manageable property nearer to a village/town once our health starts to decline or if one of us were to need to go into care following a rapid deterioration of health, or by by about age 80 in any event. The money released will be plenty enough to fund care for either or both of us.