According to research from retirement accommodation specialists Anchor, the way living in old age is perceived by society could be completely out of line with what retirees actually want.
For older people, being able to make their own decisions regarding care is one of the most important aspects of independence. The research shows that 94% don’t want their children to be responsible for care, and 77% are worried that they may be a burden on their loved ones. Unsurprisingly, most people are hoping to look after themselves for as long as possible.
The issue of social care
When (and if) the need for care does arise, 66% of retirees would prefer that their care is provided by a specialist and two-fifths (40%) are worried that they will not be able to access the care they need.
Trust in government-provided care is at a low, with more than half (56%) believing that it is failing to provide the necessary services. Recent plans to increase NHS funding by £20 billion per year have been unveiled. However, the impact of that on social care is yet to be seen, so it may be more reliable to plan to support yourself in later life, rather than relying on public-funded services.
How do families feel?
While the wellbeing of loved ones is a priority for most people, providing the care necessary to support a good quality of life for older relatives is difficult. There are four main areas which children and grandchildren of retirees struggle with:
- Time: 56% of people worry about not having enough time to care for relatives.
- Money: 51% fear not having enough money to support both themselves and a dependent relative, especially as full-time care will likely mean that they need to stop working or reduce their hours.
- Distance: 45% think they live too far away to provide the care their relatives need.
- Ability: More than a third (36%) of people state they don’t have the specialist skills needed to provide the quality care they want for their relatives.
So, older people don’t want their families to have to care for them and most family members fear that they do not have the ability or skills necessary to do so. All things considered, that makes the solution quite simple:
Create a plan to ensure that you get the retirement lifestyle you want, that will leave sufficient money to pay for care in old age, should it be needed, and which allows your family to spend quality time with you.
A plan that fits
The first step toward creating a plan is to decide what it is that you want from it. This may include talking to your family and spouse, looking at the care facilities available in your area or even talking to a retirement expert.
Once you know how you want your later years to play out, you can begin to devise a plan to make it work. There are three aspects to focus on:
The potential cost of care in later life can be an easy thing to overlook. It means that income taken in early years must be at a sensible level, so that if care is needed and Local Authority support isn’t forthcoming, the ability to self-fund still exists and hasn’t been impaired by early spending sprees in retirement.
Research has shown that some residential care homes can cost as much as £1,000 per week, while lower levels of care start at about £250 per week (Source: UK Care Guide). Therefore, it is vital that you know how you will afford the level of care you want or need when the time comes. Naturally, you will also need to continue paying for care while you still have assets above the minimum threshold for assistance. The temptation to rely on Local Authority support may be tempting, but consider the level of control and care offered, and the standards you are looking for.
The introduction of Pension Freedoms means that you can access your pensions with much more flexibility than before. This allows you to create an income stream to suit your needs and support the lifestyle you want.
2. Decision Making
As much as we don’t like to think about it, there may come a time when you are no longer able to make sound decisions for yourself. It is therefore important to have arrangements in place so that someone you trust can be your voice.
A Lasting Power of Attorney (LPA) gives another person the authority to make decisions on your behalf, in respect of financial and health matters when you are unable to do so. By discussing your wishes with the person appointed LPA (and potentially putting them into writing for future reference) you will benefit from increased confidence that you will get the care you want under any circumstances.
3. Back-up plans
Unfortunately, life is unpredictable, and no amount of planning can ensure that your life will go exactly as you would like it to. Factors such as life expectancy, illnesses and even accidents can affect the level of care necessary, and how long you need it for. As the average life expectancy climbs higher, retirement could last for 30, or even 40 years.
That means retirement planning needs to account for the potential of long-term care. So, more money will be needed to support your standard of living for as long as you need it.
But what happens to that money if you are only retired for 10 or 20 years?
That’s where a will is necessary.
If you know that you are going to be taking a large amount into retirement with you, there must be a plan in place to ensure that it is used wisely if you die before you spend it. That might include giving it to charity or distributing it among family members. Whatever you want to happen to your money, make sure it is recorded, as estates left without a will in place are subject to the laws of intestacy, which could see your assets divided in a way you don’t agree with.
Bringing it all together
Financial advice and planning will help you to align all these factors and establish a solid financial plan which supports your needs and dreams going into retirement, while making provisions for the unexpected parts of life.
For more information, or to get started, get in touch.