Why factoring later-life care into your retirement plans is vital

As you’ve been working for a significant part of your life, you’ll likely have plenty of exciting plans for your retirement.

While you’ll no doubt be keen to spend your hard-earned savings on exciting trips, that brand-new car you’ve been coveting, or providing financial support to your loved ones, it is also important that you consider expenses you may face in later life.

Regardless of how well you look after yourself, there is a possibility that you or your loved one may need later-life care.

Indeed, the Independent reports that the number of UK adults in care is projected to rise by 190,000 by 2035.

Care costs are rising, too. According to data published by the King’s Fund, in 2021/2022 the price of residential and nursing care for retirees increased by 21%, compared to 2015/16. The average weekly cost of social care for retirees in 2021/22 was £767.

Furthermore, with a report from the Health Foundation revealing that life expectancy for people living in England is expected to increase in the next 20 years, it may mean you will need to fund your care for longer.

So, read on to find out the importance of factoring later-life care into your retirement plans, and how a financial planner can help you prepare for the future.

Budgeting for later-life care is so important

As you’ve seen, rising care costs, and increasing life expectancy for UK adults means that you should not underestimate the importance of factoring later-life care into your retirement plans. There are several reasons why.

You can consider the type of care you want

Considering the cost of later-life care now allows you to look closely at what type of care you may want or need.

The main types of later-life care are:

• Home care – this would involve you paying for the cost of your care while you remain in your own home. UK Care Guide reveals that the average weekly home care cost is around £275 – or £1,100 a month.
• Moving to a care home – you may require residential care if you are no longer able to live independently. According to co.uk, the average weekly cost of living in a residential care home is £760, while the average nursing home cost is £960 a week.
• New living arrangement – you may need to consider moving to assisted living or sheltered accommodation, which would allow you to stay independent while having care on hand should you need it. Costs will depend on whether you rent or buy the accommodation, the level of care you need, and where you want to live.

You will have an idea of how far your budget will stretch

When you are planning for what you’re going to do once you’ve stopped working, it’s important to know what your income and outgoings will be. This could include anything from travelling the world to helping your children with university fees or assisting them onto the property ladder.

Adding potential costs of later-life care into your retirement plan could give you greater insight into how far your retirement income will stretch and the standard of living you might expect.

With that in mind, it’s especially important to start planning early enough so that you have time to make up any shortfall before your retirement.

This is where working with a financial planner can make a difference. Your HarperLees financial planner will use cashflow modelling to help you understand your wealth and potential retirement income over time and identify how potential economic changes could affect your finances.

You’ll have peace of mind

The most important aspect of planning for potential later-life care costs is the peace of mind preparation could bring.

By planning effectively for the future and any eventualities, you’ll be better able to relax, knowing that you’ve planned for care and still have funds to enjoy your retirement.

Get in touch

If you’re planning for your retirement or want to know more about how best to approach it, please get in touch.

We’ll help you identify how much money you will need to do all the things you want to do once you’ve stopped working and look at ways to ensure you have the funds to cover potential care costs. Please email info@harperlees.co.uk or call 01277 350560.

Please note

The Financial Conduct Authority does not regulate cashflow planning.