Planning For Care Costs?

Twointhebush

If I'm anticipating the need for care in later life due to a pre-existing condition, should I not actually plan to be able to pay for it? Do people actually make such plans separate to their pension planning? What sort of sums should we be anticipating? Should everyone be putting money aside for future care regardless of whether they have pre-exiting conditions or not?

Keep_pedalling

We certainly have no intention on relying on LA care if needed, and have factored in the possibility of needing care in our long term financial projections.

If possible we would want to be cared for in our own home with live in careers if necessary. If residential care is unavoidable then the care home has to be high quality establishment. None of this is cheap but with a combination of DB and SP plus savings to cover 5 years each we don’t have any worries about lack of choice or ending up in over my dead body grove.

Hopefully none of this will be needed, and will be a bonus for our children and probably HMRC when we finally do snuff it.

Dox

If you're anticipating the need for care, then yes, of course you should be planning for it. As to the sort of sums, depends where you live in the country and what your aspirations are in terms of quality/facilities. Have a look at what's available in your area and do some costings based on how long (I know, piece of string!) you might need care.

Then talk to a suitably qualified adviser for some guidance on how best to provide funding. Try https://societyoflaterlifeadvisers.co.uk

Should 'everyone' be putting money aside for future care? Not necessarily; their pension provision may be adequate. Others may simply not be able to afford it.

Linton

Twointhebush wrote: »

If I'm anticipating the need for care in later life due to a pre-existing condition, should I not actually plan to be able to pay for it? Do people actually make such plans separate to their pension planning? What sort of sums should we be anticipating? Should everyone be putting money aside for future care regardless of whether they have pre-exiting conditions or not?

I dont think people in general should be explicitly putting additional money aside for care...
- Most people wont need it.
- If you do need care it is likely to be for less than 2-3 years.
- given the potential costs, explicitly putting sufficient money aside to provide a very high level of protection could have a substantial effect on the financial plans. Average care home costs are perhaps be £35K-£50K/year. This will be at least partly covered by your income.

So what does one do....

The need for care should be a scenario against which you review your retirement plans:
- if you have substantial assets there is no problem. The kids or the cats home losepart of their inheritance. Tough.
- If you have minimal assets but rely on DB pensions, annuities and SP there is nothing you can do about it anyway apart from use the house equity.
- If you have significant assets which are needed to fund retirement your plans should have been based on pessimistic assumptions. So you are likely to have excess wealth available in your extreme old age. If not, again there is your house equity to fall back on.

If you have a pre-existing condition the plan should still work if you nevertheless live to an old age. The money which would have supported you in your 90s would be used to pay for care in your 70s/80s.

What you should not do is to plan to be unable to fund the care you may need. Neither should you assume that your living costs will decrease as you age. It is more likely that you will need at-home care such as cleaners, people to help you get up in the morning, someone to cook your meals etc than you will need residential care.

drumtochty

A friends mother has 24/7 care in her house in Yorkshire, she is 95 and 6 years ago here husband died and they both had care for around 3 years prior to his death. Three ladies covering the work in three 8 hour shifts plus another lady on hand for holidays of the existing ladies. She cannot lift pots to cook her meals and is a bit unsteady on her feet, therefore no real medical care just constant help to get along.


They take her to the local shops but anymore than a 20 minute drive needs planning.



Her three sons live around 200 miles away



After some financial assistance from the local authority, the sons have to fund a total of around £30,000 a year between them. Here pension pays the food bill and the cost of running the house.



A residential home would be over £35,000 a year in the locality where she lives. That is 9 years of care to be paid for. That is the longest term I have heard of.

lisyloo

I am deputy for a lady in nursing care and her bill is £925 in Bristol which is £48k per annum but income does cover some of this (even if it’s just SP & AA).
It does vary with London & Se being more expensive.
The average stay is something like 26 months, but there is a large range from a few days to 15 years.
Most people would be able to manage for a while with carers visiting at home which is cheaper.
It’s only people who are immobile or can’t make safe decisions who need to be cared for 24/7. Unfortunately if you live long enough it does become much more likely.

We aren’t specifically planning for it but both will have good pension provision.

Advances in technology e.g. crash mats, cctv have made it easier to keep people in their own homes.
Robots may help in future. I wonder if we’ll trust them with medication in the future. If we trust them to drive and fly planes then I don’t see why they couldn’t bring food, water, medication in future.

Linton

drumtochty wrote: »

A friends mother has 24/7 care in her house in Yorkshire, she is 95 and 6 years ago here husband died and they both had care for around 3 years prior to his death. Three ladies covering the work in three 8 hour shifts plus another lady on hand for holidays of the existing ladies. She cannot lift pots to cook her meals and is a bit unsteady on her feet, therefore no real medical care just constant help to get along.


They take her to the local shops but anymore than a 20 minute drive needs planning.



Her three sons live around 200 miles away



After some financial assistance from the local authority, the sons have to fund a total of around £30,000 a year between them. Here pension pays the food bill and the cost of running the house.



A residential home would be over £35,000 a year in the locality where she lives. That is 9 years of care to be paid for. That is the longest term I have heard of.

A sad and difficult story. I would have thought with this level of need a care assessment would lead to the council paying a viable % of the costs for a care home. Perhaps this isnt what she or her sons want. What does one do to avoid this sort of situation? Have a separate fund of perhaps 9X£30K? But why 9 years? It is not impossible that this old lady could live another 9 years.



The point is that at some stage you have to pool your risks and make the assumption that there will not be a perfect storm when everything goes wrong.

Dymphna60

@drumtochty - would that be about 59,0000£ a year then ?
Save half of annual earnings for 40- 45 years ? Or am I counting wrong ?

OldMusicGuy

Our financial plan includes provision for care for at least one of us for 10 years. We do not have good enough pensions to fund care, so our DC pot and other assets (like house) will have to fund it. If both of us need long term care it will be challenging, I hope it doesn't come to that.

On-the-coast

>>>"The point is that at some stage you have to pool your risks and make the assumption that there will not be a perfect storm when everything goes wrong."<<<

This sort of situation cries out for either shared risk via general taxation (as long as the quality of care is good, and available in sufficient quantity in the right locations), or some sort of insurance policy that can be bought to cover against the very high costs that only a few people will actually end up paying.

I recently read a small article on this subject at "gocompare"
https://www.gocompare.com/health-insurance/long-term-care/
which among other interesting comments states "In the past, you could buy a pre-funded care plan that would cover the cost of your long-term care home needs, but these are no longer available from UK insurers".

Any practical solutions out there except saving to cover worst-case care costs? (i say worst-case rather than average case, because no-one wants to start out in privately funded care and then be forced to move on).
Yes a house figures in my worst case planning... but that's not an option for all - and yes i want to enable my children & grandchildren to purchase property in the future through what i leave behind if possible (without compromising myself or my partners long-term care)

It really surprises me that insurance is not available... maybe this is due the governments appearing to have the intention of adding suitable legislation which would address this issue (and destroy the insurance market) without ever actually doing anything.
On the other hand... i welcome our life extensions!

fred246

Enjoy life while you have good health and make sure you have less than £23250 in the bank when you need a care home.