October: Later life advice  

Live long but plan for care

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The brave new world of retirement planning

Live long but plan for care

Nobody likes to think of the prospect of requiring regular healthcare assistance in later life, yet the cost of care can be substantial if one has not prepared for it.

A Partnership poll of 10,782 people found 77 per cent of over-45s are yet to think about care or speak to their loved ones about it.

The figure is higher, at 80 per cent, for those aged between 65 and 75 years, while 64 per cent of those aged over 75 have yet to take this step.

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Steve Lowe, group communications director at Just Retirement Partnership Group, said: “What triggers people to seek a deeper understanding of care fees is what goes on in their personal life. People aged between 45 and 50 are likely to start to see their parents struggle with their health. It becomes real for them then, and they will start thinking about it even more and will likely raise the topic with their adviser.”

The population in the UK is ageing and, for many, the improved life expectancy means they will have to arrange provisions for an extended period in which they require care.

According to the latest Office for National Statistics figures on health expectancies at birth and at age 65, published in 2014, women born between 2009 and 2011 are estimated to live 66 years in ‘good’ health – representing just over 80 per cent of their life expectancy.

For men, the figure is 64 years – representing 82 per cent of their life expectancy. This suggests that both sexes are likely to encounter health issues after the age of 65, on average.

Meanwhile, the percentage of people aged 65 per cent and over is forecast to rise from 17.7 per cent in 2014 to 24.3 per cent by 2039, according to 2016 ONS figures.

One of the most important decisions for individuals to make when considering the cost of care is whether they are able to receive help in their own home or would need to be moved into residential care.

The average cost of a being in a care home varies from area to area, but averages to £29,250 a year for residential costs, rising to more than £39,300 if nursing is required, according to healthcare specialist Laing & Buisson Care of Older People UK market report 2014/15.

Home care cost also varies, depending on location but also the level of care an individual requires. The Money Advice Service said individuals should allow an average of around £11,000 a year if they have a carer for 14 hours a week.

It adds that the cost for full-time day care starts at £30,000, but that figure can escalate to more that £150,000 if a helper needs to move in and provide round-the-clock assistance.

Justin King, chartered financial planner and registered life planner at Dorset-based MFP Wealth Management, said: “For the highly affluent clients the considerations are different. It is not an issue of money, but of personal preference. We had a case where a lady moved into a care home far too early, simply because she did not want to be by herself in her own home.”