Predicting future care costs

chockydavid1983

Hey everyone

I'm in the process of working out how much I will need to afford my desired lifestyle in retirement. I believe I can currently estimate most parts of it pretty well but I'm struggling with estimating future care costs. Obviously this would be based on certain assumptions to do with health but I would like to be able to estimate to a point. I'm curious as to others' strategies here.

Thanks,
Chris.

NedS

You can't predict future care costs - they could be astronomical or they could be zero. It's a pointless exercise trying to predict what they may be.

I don't have sufficiently large pension assets to have the luxury of worrying about very large care costs, so my strategy is that if I need residential care, I can sell my house to pay towards it as I will no longer need it to live in. If I die in my own home then the kids can have the house.

If both I and the OH are still alive and one of us needs residential care, I'm afraid we will be looking towards the local authority for assistance. Luckily, on average I think only a small percentage of people end up in residential care.

born_again

Live for today. Might not be here tomorrow..

Pension, aim for what you think will give you the lifestyle you would like in good health. If mortgage free that is your care costs.

Care costs are something that you can never factor in, so best not bother.

lisyloo

My strategy would be to use my house (could do equity release if partner still alive).
it's very difficult to calculate although you could work out an annuity for it if you really want to.
I can't lay my hand on any stats right now, but I believe you have a greater chance on NOT needing residential care than needing it i.e. less than 50% chance.

chockydavid1983

Thanks all. I would be mortgage free if and when I needed residential care so using that to fund it seems reasonable.

Grumpy_chap

chockydavid1983 said:

I'm struggling with estimating future care costs. 

If you can spare several arms and three legs that should just about be sufficient to cover it

I think, on a practical level, if you have sufficient so that you are self-funding for the first couple of years, that means you get to make your own choice of care home (or your nearest and dearest do with your interests at heart).  The threshold for self funding currently sits at a little under £25k, but £100k would be enough to take you clear of any Local Authority busybody sticking their nose in.  Once you are in a good care home, if the money runs out, I understand that Local Authorities typically continue to fund the same place.  They don't have to and can try to move you somewhere cheaper, but that can be argued against also.

SVaz

I modelled a retirement scenario on Guiide that had a ‘protected’ pot of £100k in the background to use for care fees etc. 
That would give approx. 2-3 years fees alongside State and DB pension.   After that would be the house.