Should I start saving extra for long-term care at home?
We have always encouraged our Wealth Planning clients to include provisions for long-term care in their plans. However, care homes have recently been under the spotlight for all the wrong reasons, and sadly the post-COVID-19 position will not be any easier. Some care homes will come out of this much better than others, but the likely upshot is that when the time comes more people may now prefer to be looked after in their own homes.
Together with our 'Covering the cost of care homes' blog, this article is your post-COVID guide to long-term care choices.
Is long-term care at home a valid option for me?
In the past, many people with long-term illnesses would have preferred to be cared for at home. However, the sad reality is that some had to move into a nursing or care home because their families weren’t able or willing to help. This is likely to change in the future, as families step up to the plate.
It feels like a very long time ago that Boris Johnson stood up for his first speech as Prime Minister and pledged to fix the social care crisis. 12 months on and that confident promise couldn’t be further away from reality. Once again, many people are caught in the headlights, not knowing whether they should just sit tight or step forward and take action.
How much might care at home cost me?
Care at home is certainly not a cheap option. If you have complex needs and require carers to move in around the clock, it could cost about £83,200 per year, according to The Live-in Care Hub 2016 report. Elder (one of the leading UK live-in care specialists) states that around £23 billion is spent on care each year in total, of which £15.7 billion is for residential care and £7.3 billion for domiciliary (in-home) care. In our opinion, this is likely to change dramatically in the future.
For many people, the last few months have hit both their pockets and their confidence. But it has also given us time to reflect. Families have been brought closer, so maybe a more caring society will be born out of this madness – we can but hope.
Is this a good time to make plans for my long-term care needs?
Many clients of Wealth Management firms like ours are in the fortunate position that they will be able to weather this storm. So now is the time to take action. You might decide to write or update your Will, make immediate gifts to your loved ones and enjoy seeing them put those funds to good use, or review your investments – the pandemic has encouraged many of us to change or firm up our current arrangements.
What we can be sure of is that this ongoing issue is not going away any time soon. So be brave, act and do something positive.
Whatever you decide about your future, make sure you share your wishes with your family or other loved ones – perhaps through a Power of Attorney. Let them know whether you would prefer to stay at home or move to a care home, and what provisions you've made to pay for either.
How can I start making plans for care at home?
As we all know, there’s rarely a magic bullet that makes everything better, but here are three practical steps you could take straight away:
- Try not to panic if your investments continue to wobble – just make sure they’re being managed in line with your current attitude to risk (not your attitude 20 years ago) and your capacity for loss. This is particularly relevant if you or your loved ones are faced with the prospect of needing care.
- Review your financial plan. Take stock of everything and check your arrangements are still on track to meet future care costs; a qualified Wealth Planner will be able to help here. The last few months have been traumatic, so arrange your review as soon as possible to see where any gaps can be plugged.
- If you haven't yet set up a financial plan to review, this might be a good time to start.
All the above can be addressed by a cash flow review, where different 'what if' scenarios can be considered.
We know that some of our older clients shy away from this type of life planning as they feel there’s not enough time left to plan. The last few months will have made even more people anxious about their longevity and unwilling to take decisive action.
However, despite our current fears, most of us will live to a ripe old age, and making arrangements for the future is both essential and wise. Planning how to live a happy and healthy life doesn’t just happen by magic. It takes work and the ability to adjust when things change.
The most important result of the current storm (there will be others in the future) is that we should all try to increase, or begin, financial discussions with our families and loved ones. Many fear this step, but it is perhaps the single most vital piece of advice we can give.
What happens if I decide I would prefer to go into a care home?
Many people enjoy the company and variety of entering a care home in their later years. Others resent paying the extra costs of home care. If you are considering this option, read our care homes article, which includes a case study showing possible financial solutions. We can help you plan for this option, or show you how to keep either option open and make your decision when the time comes.
Get in touch today to arrange your financial review
Have you set up a financial plan for care in later life, such as a ring-fenced pot or an insurance policy? Is it enough to cover care at home rather than just a care home? Have you thought of using equity release? Are you relying on the generosity of your family to pay for your care or look after you at home? Have you discussed your plans or wishes with your loved ones?
A financial review, particularly with cash flow modelling can help you to answer these questions and set up plans to make the future easier for you and your family.
At Canaccord Genuity Wealth Management, our team of independent wealth planners includes experts who are especially qualified to provide advice in this area, as well as some who are trusted accredited members of SOLLA (Society of Later Life Advisers). Please get in touch if you would like to talk to one of our specialists about any of the topics covered in this article, or anything else that is concerning you. We will also be happy to arrange an initial, no obligation conversation to discuss your personal circumstances or those of a family member who might need a plan for care at home. We can set up a video call to include different family members if that would help.
You can contact us or call us on +44 20 7523 4500.
Let us contact you
If you would like help but you're unsure which of our team to contact, let us help. We can put you in touch with an expert that's ideally suited to your wealth management needs.
If you would like to read more about planning for the post-COVID-19 world:
- What do I need to know about care homes and care costs?
- What can I do to mitigate any tax rises after COVID-19?
- How can I use my wealth differently in a society being changed by COVID-19?
- How has the COVID-19 pandemic affected your retirement plans?
Investment involves risk. The value of investments and the income from them can go down as well as up and you may not get back the amount originally invested.
The tax treatment of all investments depends upon individual circumstances and the levels and basis of taxation may change in the future. Investors should discuss their financial arrangements with their own tax adviser before investing.
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IMPORTANT: Investment involves risk. The value of investments and the income from them can go down as well as up and you may not get back the amount originally invested. Past performance is not a reliable indicator of future performance.