Pension & ISA savings, and later life care costs

Audaxer

Robert_McGeddon wrote: »

FYI £30K pa may be low. My Mum is in a nursing home (not one of the flashier ones) in Harrow. She's being invoiced £1,050 per week. Additionally, the nursing home gets approx £150 per week from the NHS as a 'nursing component' or similar.

Interesting to note that care costs could be up to £50k per annum or more. If you did have £100k of savings let's say that 2 years of care costs in a good care home of your choosing. If care was still needed after the money had run out for the £50k a year care home, would the council continue with the funding for care at that home, or would you have to be transferred to a cheaper care home?

Keep_pedalling

Audaxer wrote: »

Interesting to note that care costs could be up to £50k per annum or more. If you did have £100k of savings let's say that 2 years of care costs in a good care home of your choosing. If care was still needed after the money had run out for the £50k a year care home, would the council continue with the funding for care at that home, or would you have to be transferred to a cheaper care home?

Hopefully There would be some income to make that £100k last a bit more than 2 years.

lisyloo

Audaxer wrote: »

Interesting to note that care costs could be up to £50k per annum or more. If you did have £100k of savings let's say that 2 years of care costs in a good care home of your choosing. If care was still needed after the money had run out for the £50k a year care home, would the council continue with the funding for care at that home, or would you have to be transferred to a cheaper care home?

As already mentioned don’t forget about income.
Most people should be getting state pension, attendance allowance, usually private pension, plus some interest on their capital.

If you are in a home that is above LA budget it’s likely you would be transferred which is a very bad scenario and why an annuity could be an answer (although with only £100k it’s pretty touch and go).

It’s possible (but not likely) that you could be in a home that is within LA budget.
My MIL was initially LA funded although we had to go to “panel” as their fees were outside budget. She is now self-funding. We hope that if she runs out of money that she would be able to stay in the same place.
I would suggest this is unusual as mostly you would not choose to stay somewhere within LA budget if you had the choice.

If you are concerned about this risk then you could consider an annuity which will pay out until you die, however note it’s not guaranteed to keep up with increases (this was one of our main objections) so with £100k you might not have enough to top up if fees increase.

If you have a home you could consider equity release if the spouse is living in it. Not ideals but I think worth mentioning as a possibility.

A 3rd party such as a relative can pay a top up fee to keep you in the same place I.e. amount above the LA rate, however this is a big ask.
We couldn’t do this as we have 4 parents and it’s an indefinite commitment.

OldMusicGuy

Our number takes into account that we will have enough by the time we reach age 92 to fund between 5 to 10 years in a decent care home (topping up SP) through a combination of home equity and what will be left in my DC pot. I have a detailed 30 year forecast spreadsheet that enables me to model that.

I expect that as we get closer to really old age I will gradually annuitize what's left in the DC pot to give a good base income. House equity can them provide the rest if needed.

We are not planning on leaving an inheritance for our son. We are gifting him some of the equity from our house now (through downsizing) but telling him not to bank on any more. He might get lucky, he might not. It depends how long we last.......

Sea_Shell

The main problem is that care homes are so expensive, you'd never retire if you tried to specifically save up "just in case".

As it is they cost way more than most people take home in pay, so it's an almost impossible task anyway!!!

I'll take my chances....i'm not working for another 20 years, just to add to the "care" pot. If all the money's gone by then, so be it.

lisyloo

Agree with you on that.
I don’t think most people can save enough in addition to their pensions on the off-chance and even if we could some of us would then have LTA issues.

Most people after all aren’t going to have enough for a decent pension.

This is going to be a big issue for local authorities as numbers increase.