3 sensible reasons to plan ahead for your later-life care arrangements

If you’re still working or you’ve only recently retired, planning for later-life care might feel premature. But thinking ahead and making arrangements early could ensure that you’re looked after in the way you want to be when the time comes.

According to research published in IFA Magazine, 76% of over-45-year-olds have made no plans for later-life care, despite having strong preferences about how they are cared for. For example, not wanting to go into a residential care home.

Read on to find out how planning for later-life care could benefit you and your family. 

1. Take control of your future

Including later-life care arrangements in your retirement plans could help you have the future you want.

Planning ahead can help you take control of how you’re looked after, rather than having to respond to sudden changes in circumstances or needing loved ones to make decisions for you if you’re not able to do so.

One of the biggest decisions you’ll probably need to make is which type of care is right for you. There are many options to choose from, including residential care, live-in care and assisted housing. You may also want to think about how to budget for your preferred option.

Setting up a Lasting Power of Attorney (LPA) might be worth considering. This is a way of giving someone you trust, usually a member of your family, the legal authority to make decisions on your behalf if you are no longer able to do so.

There are two types of LPA, one for financial decisions and one for health and care decisions. The latter would enable your chosen “attorney” to make decisions such as where you live, what medical care you receive and who you have contact with.

Planning for later-life care brings the future into the present so that you can take control now.

2. Reduce stress for your loved ones

Making arrangements for later-life care and talking to your family about your plans could reduce stress for your loved ones during a difficult time.

If your preferences and expectations are clear, there’s less room for disagreements or concern about what’s in your best interests.

You might feel uncomfortable talking to your family about your later-life care arrangements, but communicating your wishes could ensure that you have the life you want and help your family cope with your changing circumstances.  

If you feel strongly about the type of medical treatment you want to receive or avoid, a living will or “advance decision” could help you take control of such decisions and remove the responsibility from your family. 

This legal document allows you to refuse treatments that you do not want. And it only comes into effect if you lose the capacity to make or communicate decisions about your medical care.

By putting such plans in place, you could reduce the uncertainty and stress your loved ones may feel if they are left to make decisions on your behalf.

3. Identify financial planning goals

Care in later life can cost a lot of money long term. The exact cost will depend on your chosen care option, individual needs and where you live in the UK. 

For example, according to figures published by Which?, on average residential care cost between £686 a week in the north-east of England and £955 a week in the south-east in 2022/23. 

Based on these figures, if you are self-funding your care you’d need between £35,672 and £49,660 to cover this cost for one year.

With costs running so high, planning as early as possible could give you more time to save for later-life care. 

Exploring your options, estimating potential costs and reviewing your savings and investments might help you to assess if you’re on track to cover later-life care costs. Alternatively, it could allow the opportunity to set achievable financial goals that you can start working towards.

For example, you might decide to increase your pension contributions now to help pay for care later. A benefit of paying into a pension is that you could receive generous tax relief on contributions up to 100% of your salary or £60,000, whichever is lower (2023/24). This could potentially help you to fund your later-life care arrangements in the long term.

You might also consider setting up a trust to fund your future care arrangements. One or more trustees of your choice would have the legal authority to manage the funds in your trust in accordance with your wishes. So, this could be a useful way of ensuring that your money is used to look after you if you become unable to care for yourself.

Making later-life care arrangements could help you and your family prepare for changes in your circumstances. It puts you in control of your future and ensures that your loved ones know what your wishes are, which may reduce stress for them and could help you have the future you want.

Get in touch

If you’d like to learn more about the costs involved in later-life care and your options for meeting these costs, please contact us by email at info@lloydosullivan.co.uk or call 020 8941 9779 to see how we can help you.

Please note

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future results. 

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates and tax legislation may change in subsequent Finance Acts.