Our goal at Wells Gibson is to help clients live a fulfilled, purposeful and contented life, and that includes making sure they can live the life they want without the fear of running out of money. When they’re free from that worry about their financial future, it allows them to make the most of today. You never know what’s going to happen.
Covid-19 pandemic has prompted many people to reconsider their later life care options.
According to new research from provider Key, 35% of over-55s say the pandemic has made them carefully consider their later life options.
A further 29% of respondents said the pandemic has made them more determined to receive care at home in later life.
The new report, Tackling the Care Question, is the third in a series published since 2019, tracking the attitudes and opinions of over-55s.
This edition of the report noted a marked difference in over-55s financial confidence before the pandemic compared to how they feel as things start to return to normal.
Fewer people felt they could meet the cost of care using savings and investments, a decline of 11% to 33% and pension income (-8% to 32%).
There was also an increased expected reliance on local authority funding, up 6% to 14%.
The report noted that marginally fewer people say they have no idea how they will meet the cost of care in later life, falling by 1% to 14%. The proportion of respondents who knew they would be unable to pay for care doubled, reaching 11%.
More than one in four say they will use equity in their home to help them, which is higher than in 2019 when just 19% said they would use property wealth as part of care funding.
Will Hale, CEO at Key, said:
“The pandemic has impacted not only how people live their day to day lives but also how they plan for the future.
“While the fact that the vast majority of people will need to make some contribution towards their own care has been a reality for many years and is likely to remain a constant even under the new Care Bill, people are starting to wake up to what this actually means.
“Unfortunately, this has seen an increase in people who are worried about how they will meet these costs, dubious about how well their pensions and investments might support their choices and therefore looking to rely more on local authority support.
“Others are keen to use their housing equity and more determined than ever before to receive care in the comfort of their own homes.
“People need to remember that forward planning is vital to ensuring that you have choices around how you pay for care and increasingly a multi-asset approach works best. Taking the time to speak to an adviser who specialises in financing care and navigating through the system can play dividends in the future.”
Also within the report are details of the average annual cost of care in a nursing home, rising to its highest in England at £50,908 a year.
The highest average residential care costs in Scotland are £39,988. Northern Ireland reported the lowest UK average residential care costs, at £28,652.
Even paying for care at home can be expensive – around two hours a day can still cost about £16,800 a year.
Your ‘timeline’ is an essential element of cash flow planning and financial forecasting, to help you prepare for life’s transitions. This involves thinking about the different stages of your financial life – the savings years, spending years, later life years and considering key milestones.
You can read more about steps to authentic investing, the six wise financial strategies and how to implement each in your life in my book ‘Purposeful Wealth’ now available in hardback.