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Do we long-term care?

henry tapper

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

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.

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;

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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