The Covid-19 pandemic has meant we’ve evaluated many areas of our lives and priorities. One area that’s now being reconsidered by the over-60s is their later life care plan.
Research suggests that the challenges and restrictions care homes faced during lockdown mean people are keen to explore the alternatives. With many care home residents being vulnerable to illness and the proximity to others, they faced higher infection rates. This sadly led to death and serious illness in some cases, with loved ones unable to visit to offer comfort.
On top of this, care homes stopped permitting visitors, in line with social distancing guidelines, which had an impact on the quality of life and relationships for residents.
As a result, it’s not surprising that one million over-60s that had originally planned to go into care homes later in life if needed, are now rethinking their plans due to growing concerns from family members, according to research from Canada Life. Nearly a fifth (19%) of Brits who would have previously been open to care homes as an option for family members, now wouldn’t consider it.
What are the alternative options?
Moving into an assisted living facility, which offers more independence than a care home, or moving to a more manageable property are two of the most popular options. Around a fifth of Brits would choose each of these as their primary option. Others plan to rely on family for the additional support they may need later in life. One in ten would consider moving into a spare room at a loved one’s home while 6% would opt for a granny annexe.
Whether staying in their own home or moving in with family, respondents recognised the need for adaptation. In the Canada Life survey, two thirds (67%) believed they need to alter properties in some way. The most popular home improvements include:
- Making modifications to the bathroom (34%)
- Installing an emergency alarm (27%)
- Installing a chair lift (22%)
- Buying new furniture, such as a bed with rails (22%)
- Installing mobility features like ramps (19%)
The number of people recognising the need for such modifications shows over-60s aren’t shying away from the fact that more support may be needed in their later years. However, there is one important factor that many have failed to overlook, and that’s the associated costs.
Planning for the cost of later-life care
Worryingly, the Canada Life research also found 55% of over-60s haven’t considered how they would fund later-life care or necessary adaptations. What’s more, a fifth (21%) expect to use their State Pension to cover these costs, but at £175.20 per week (£9,110.40 annually), it’s unlikely to stretch very far.
If you moved into a care home, you could expect significant outgoings. In 2019, the average cost of a residential care home was £33,852 per year, rising to £47,320 if nursing care was included.
Alternative options may be cheaper, but the costs still add up. An assisted living facility will come with ongoing charges for the care provided. If you were to remain in your home but required the support of a carer for two hours a day, you can expect to pay around £20 per hour. That may not seem like much but adds up to £14,560 per year.
Even if you remain in your home and don’t require additional support, necessary adaptations can take a sizeable chunk out of your savings or income. In England, council support may be available if adaptations cost less than £1,000 if it’s been deemed necessary. Further support is typically means-tested, so the costs could fall to you.
Despite the sums of money associated with later-life planning, the financial aspect remains overlooked. But it should be part of your wider financial plan.
As you think about what type of support you’d prefer later in life, it’s worth reviewing your finances and overall goals. Financial planning can help you understand how your assets can be used to provide you with security for the rest of your life, including where some form of care is needed.
It’s a process that can also create a safety net for when obstacles derail your plans. You may intend to move in with a family member but circumstances outside of your control mean it’s not an option when the time comes. With a financial plan that’s considered this in place, you can rest assured that other options are still available. It can also help you understand how the potential cost of care could affect other priorities, such as the income you take during early retirement or the legacy you leave behind for loved ones.
If you’d like to discuss your plans for funding later-life care, please get in touch. We’re here to help you create a blueprint that considers your wishes and give you peace of mind.
Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
