Do we long-term care?

Older people find it easier to deal with death than with the implications of detoriating mental and physical age.

This is an issue that effects most of us in some way

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Walking back to the City from Irwin Mitchell’s seminar on the “Elderly Care Crisis; a tipping point”, I talked with someone who’s parents had prioritised investing in funeral plans but had made no provision for power of attorney. To their daughter this was no help to her, she could meet their funeral expenses but would find it much harder to manage their affairs if they couldn’t.

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Be Brave

This is just one example of the strain that a lack of planning  can create on families. It is understandable from a behavioural point of view that we prefer the finality of death to the uncertainty of living with decreasing capacity, but we must be brave and take on these problems before they overwhelm us.

What goes for families, goes for Government, we have been kicking the can down the road since the Dilnott Commission in 2011, the demographic challenges of an ageing population will ultimately make a chronic issue acute.

But there are things individual, families and Government can do to plan ahead to ensure that we do not eventually have an elderly care crisis. Irwin Michell argue that we will reach a tipping point by 2029 and that unless we start taking action now, we may leave it too late.

They are calling on us to be brave and start taking decisions to avert future problems taking six steps now.

  1. Review and reform the care funding system
  2. Raise the eligibility criteria for support in paying for care
  3. Help informal carers looking after elderly people
  4. Enforce controls to plan and allocate land for retirement, care and nursing homes
  5. Educate workers on the importance of pension savings
  6. Raise awareness of the need for financial planning

A brave seminar focusing on what we can do

I was struck by the honesty displayed by delegates at yesterday’s event. The issues that we are dealing with in old age range from incontinence to dementia and many elderly people lose their dignity in lonely isolation.

The consequences for those who care for them are also severe. The emotional and financial cost of leaving work to care can be as great as the cost to a family of long-term nursing whether brought in or offered in residential homes.

Too often events like this simply pass the buck to Government but those presenting (and chair Ros Altmann) focussed the conversation back to what people can do regardless of Government,

With the average cost of funding long term care estimated at £96,000 , only 10% of households can afford to pay for nursing fees out of income.

There is no painless solution but planning can spread the pain and make it manageable. The kind of steps people can take, typically with professional help include;

  • Managing your assets and making sure they’re protected for your future
  • Getting the most out of your pension so it continues to grow and doesn’t run out
  • Maximising your savings by making the right investments
  • Downsizing your property and making the process as easy as possible
  • Structuring your retirement plan so you can pay for elderly care if you need it
  • Handing over a family business and its assets to the right people or groups
  • Any tax relief you could benefit from and making sure your plan is tax efficient.
  • Understanding your benefit entitlements and maximising them

Insuring against future uncertainty

When I started selling insurance, I was told that a pension was an insurance against living too long. Nowadays , the emphasis has changed and many people think of pensions as part of wealth planning.

I have seen too many cases of the planned inheritance dissipating as families find as much as £2000 per week to care for elderly parents.

These costs are insurable and today I will be finding out more about the immediate care annuity, a product offered by Aviva, Just Retirement and now Legal & General.

I’m told that the vast majority of these annuities are bought by those who have power of attorney on behalf of those in care and those who ultimately pay for that care. By insuring against the worst case scenario all parties can be comfortable that those in care are able to stay in care without feeling guilty and that the anxiety on families and carers created by care bills is reduced.

I cite this as one financial product. There are others. Lifetime mortgages are a way of unlocking the value of a home without it having to revert to an insurer of be sold. As Irwin Mitchell partner Jeremy Raj put it yesterday

“we cannot underestimate the emotional value of the family home”

Insurances are designed to make insurers money but make our lives easier. I am not suggesting that financial products like pensions, care annuities or lifetime mortgages are a substitute for love and dedicated care, but they are at least a way for us to plan against uncertainty.

Do we long-term care?

I think we do. We are all scared of growing old and “losing it”. It is harder to think about than death and the consequences of death (which are easier to plan for).

We do care about “long term care” but we are often not brave enough to do anything about it. Talking with your parents and other elderly loved one about planning ahead, about a lasting power of attorney is a tough conversation -everyone has to be brave.

Taking steps to meet future bills whether they relate to properties, businesses or insurances needs the kind of plain-speaking we get from Martin or Paul Lewis. We need to be brave enough to give and take advice.

I think it best to take advice, particularly from a Solla accredited financial adviser, 

You can find an adviser near you by following this link

If you do not want to take financial advice , see a good solicitor. I think I have seen enough of what Irwin Mitchell have been saying to say they are a good solicitor but there are many like them  up and down the country. Most local practices has at least one specialist in these issues.

If we don’t set aside to plan for our and our future dependents now, the cost may be too high tomorrow.

Please “long term” care.

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About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
This entry was posted in actuaries, advice gap, age wage, annuity, Consolation, pensions and tagged , , , , , , , . Bookmark the permalink.

4 Responses to Do we long-term care?

  1. Derek Scott says:

    I agree we do, Henry, but wait to see the details of the Government’s immigration proposals and its impact on staffing.

    Here in Scotland my 92-year-old father-in-law enjoys pretty good, we think, care and even has a young care nurse from Budapest who talks to him in Esperanto, a language which I can only “speak” via Google’s excellent Translate app, but in which my father-in-law has been a fluent speaker since the early 1950s. Another older (and Scottish) nurse learns one Esperanto saying a week to keep them both on their toes. These men are among many unsung heroes and heroines working in our care homes today.

    Financial and medical powers of attorney are also a must. We have written ours too.

  2. Pingback: Will MAPS “Challenge Groups” challenge? | AgeWage: Making your money work as hard as you do

  3. Brian G says:

    The immediate care annuity is simply an income paid tax free to the care home. The product itself provides tax efficient income nothing more nothing less. The real issue is that hundreds of thousands of people will need long term care and yet, even though many of us will be desperate to receive such care, we don’t show how much we value it. Care workers are treated and regarded as slave labour, their caring nature and desire to help their patients are compromised by workloads that leave them no time to properly look after vulnerable people. They are paid a minimum wage and forced to choose between their own wellbeing and those of their patients because of chronic staff shortages. And now this idiotic government and our vacuous incompetent home secretary want to cut off an essential source of care workers with their salary related “points system” for immigration. The things you listened to at the seminar are lovely things for wealthy people. Most people don’t have a pot to piss in, and there won’t be any care workers to provide that pot and empty it when poor people need care.

  4. John Hutton-Attenborough says:

    The Society of Later Life Advisers (SOLLA) does very much care about this and you will find passionate advisers dedicated to helping clients find a path through what really is a crisis and becoming more so every day. It is also inequitable with many care homes including self funded residents living in the adjoining room to Local Authority funded resident, one paying £1500pw and more compared to the local authority person who is contributing nothing. The ICA is just an insurance policy to secure their ability to continue to live where they have chosen to live for the rest of their lives, and put a cap on these costs so that potentially there may be something left over for the rest of the family.
    I spend more time being a social worker than a financial adviser on too many occasions delivering much needed guidance and support which is sadly lacking from the adult care services or the NHS.

    Have a look at

    A worthy organisation…

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