There are aspects of financial planning that drive towards a happy objective – such as planning for a move to a bigger home, saving for a wedding, or providing funds for the education of children or grandchildren.
Then there is another topic that is unlikely to ever bring the same joy: planning for care. The trouble is, whether we like it or not we are getting older by the day, and ageing bodies can need a lot of looking after.
Most people are unlikely to actually spend their final days in a care home – just 4 per cent of the population 65 and over and 16 per cent of the over-85s live in care homes, according to a 2016 survey by Laing & Buisson.
But the likelihood of needing other forms of care is much higher. As we age, so our care needs are likely to increase, perhaps beginning with just some help around the home and growing to more healthcare-related support in later years.
Like it or not, the subject of provision of care can very quickly become highly significant for a person and their family, and not least financially.
Looking for solutions
There is no doubt the funding of care nationally is in crisis, and that nobody has come up with a perfect solution to fix it. New suggestions hit the headlines frequently – recently, a one-off £30,000 charge paid by people when they reach 65 was suggested by the Social Market Foundation.
Other possible options mooted include increasing income tax or national insurance, or a tax or social care premium for the over-40s. So far, no strategy proven to be vote-winning has really come to the fore.
While politicians continue to try to come up with new ideas, the growing elderly population does not have time to wait and nor should your clients’ personal financial plans.
No matter what political solutions may be dreamt up this year or over the next decade, financial advisers need to be ready today to offer their clients solutions that will help them prepare for an uncertain future.
In the meantime, advisers also need to keep abreast of ongoing developments, not least any announcements that may or may not come out of this year’s Budget.
What do clients want from their later years?
So what exactly is it that actually needs planning for?
According to a survey of almost 5,000 people carried out by the charity MHA in 2015, alongside health and wellbeing, and companionship or loneliness, one of the most significant concerns for people about the ageing process was personal finance – whether people would be able to afford a good retirement, including paying for care and support if they needed it.
Of course the definition of a ‘good retirement’ can be very personal, so asking a few searching questions of clients is a good place to start.