Chartered Financial Planner, Andrew Pyrah, is a later life specialist, accredited by the Society of Later Life Advisers (SOLLA).
It’s Dementia Awareness week and according to Dementia Statistics around 52% of the UK population knows somebody who has suffered from this condition. Dementia is an illness which is likely to increase vulnerability as we age, so it’s important for us all to ensure we have the correct legal and financial safety nets in place.
Having a later life care specialist on our Progeny team means that we can help to better prepare our clients and their loved ones for these potentialities and is an important part of the service we provide. Arranging care for a loved one is not only an emotional time but can also be very complicated. There are many considerations to address, so we offer some questions to ask yourself and guidance to help you prepare.
What type of care is needed and how will this be funded?
There are many different care options available depending on the individual’s personal situation. How much you will pay depends on:
- your health and mobility
- the level of help and support you need
- the level of your savings, assets and income
- what local council or NHS funding you might be entitled to
- availability of support through charities and, Trade Unions and Professional Bodies for retired members
Depending on your circumstances, you may not qualify for funding from the NHS or your local council. Even if you do, the amount you receive might not be enough to completely cover your care costs either at home or in a care home. If this happens, you’ll need to think about how you’re going to top up any contributions, or if you need to pay for it yourself.
Rather than a lifetime of endeavour disappearing in care fees there are options you can use to fund care with robust planning; from specialist financial plans, for example, using an existing investment portfolio, or taking capital from your home through ‘Equity Release’. A financial planner specialising in later life care can best advise you on which option would work best for you and your family.
Ask yourself, are the correct legal documents in place for you to act on behalf of your loved one?
It doesn’t matter whether you are 18 or 80, legal documents are an important part of the later life financial planning process. We should all hold both types of Lasting Powers of Attorney – Property and Financial & Personal Welfare, so that our wishes are met if/when we cannot take these decisions ourselves.
Spending money on legal contracts may not seem like the most exciting purchase, but the cost of not holding these documents can be much higher if they are not in place when required. The pandemic brought home to many families the consequences of not having a will or LPA in place, the additional cost and heartache that this could bring at an already difficult time.
For example, if an LPA is not in place and an individual suffers a temporary or permanent illness/medical condition which leaves them unable to make financial decisions, a spouse or family member will be unable to access or make changes to existing arrangements without applying to the Court of Protection. This includes things like bank accounts, investments and even gas bills.
A pension can only be held in an individual name, however, many people now use pension drawdown, taking regular income from their pension pot to fund their retirement. However, if the holder of the pension plan is incapacitated and unable to do this and a Lasting Power of Attorney is not in place, it can lead to financial hardship for the individual and their family while they apply to the Court of Protection for permission. In addition, it is not unusual for the Court to nominate an independent deputy in addition to the family, which also brings extra costs.
Sufficient funds for a surviving spouse
If there is a surviving spouse, will they be left with sufficient funds for their day-to-day living costs?
When you’re planning later life care it’s important to remember to include the eventuality of a spouse surviving and needing to fund their cost of living. If all savings, assets and investments are spent on specialist care for one partner, there may not be enough for the partner to live on and, this must be considered when financial planning.
When looking into the elements of planning for those who may lose capacity, many issues need to be considered including eligibility for state benefits, mental capacity, and vulnerability of the individual.
Assessing the vulnerability of a client can be a complex process, but one the whole team at Progeny understand as part of the Vulnerability Taskforce. Head of Compliance and Policy, Sheridan Hindle shares what this means for Progeny and our clients:
“Addressing the needs of clients in vulnerable circumstances requires the efforts of the whole firm and is not something purely owned by Compliance departments. Senior Managers play a big part, by recognising and understanding the needs of client in vulnerable circumstances and building these into their business strategy, product design and distribution.
“Commitment to the Financial Vulnerability Taskforce charter is not just about the policies and processes we adopt, it is about education and changing industry mindsets. Whilst clearly vulnerability in later life can present challenge, vulnerability can present itself in many guises at any point in a person’s life and so firms need to be alert to these. Often clients are unaware of the vulnerability of their circumstances and so it is important that employees have the tools, skills and competencies needed to identify clients in vulnerable circumstances and are able to support and protect those individuals to ensure that they are not disadvantaged as a result.”
If you need support incorporating later life care into your financial plan, please contact us today to see how the Progeny team can help you and your family.