The UK elderly care system faces a crisis.
Older people are making up more and more of the population and people are living for longer. The proportion of people who need elderly care – whether that’s at home, in retirement living, or in a nursing home – is also rising.
"It's important that we all accept and anticipate that a move into care is a possibility for us in the future."
Kelly Greig, Partner
But the amount of funding for elderly care isn’t rising as much as the demand. Many people aren’t saving enough to pay for their own elderly care and the government’s current plans won’t cover the costs either.
This is worrying when many people are already supporting elderly loved ones with money that could be going towards their own retirement funds.
Our Elderly Care Crisis report, published with Cebr (the Centre for Economics and Business Research), show that these and other factors will come together to create an unmanageable ‘tipping point’ in 2029. This is when there will be more people needing elderly care than the system can support.
"If you want appropriate care in later life, you can’t assume that this will happen – you’d be well advised to take matters into your own hands."
Mathieu Culverhouse, Partner
So what can you do to make sure you have a comfortable retirement and get the care you need later in life?
You can plan. And we can help.
Planning for later life can be complicated, involving lots of different types of legal and financial advice. But you can get it all under one roof at Irwin Mitchell and make sure you get one fully joined-up plan for the future.
We can help with:
Pensions, savings and investments
Our report finds that, on average, working people get £225 a month added to their pension pots from their own and their employers’ contributions.
We found that you may need to save at least an extra £575 a month to ensure a comfortable retirement.
"It’s never too late to start but the earlier you do the easier it is."
Richard Potts, CEO of IM Asset Management Ltd
Many people assume that minimum contributions to a pension scheme are enough. This isn’t true. But However even if your pension is enough to live off at home when you retire, it’s not necessarily enough to cover any professional care you need.
Residential care can cost over £1,000 a month and the average total that someone spends on their time in a residential care home is £94,900. These prices are already higher than many people expect and are likely to rise above inflation. Do you know if your pension can cover that?
You can’t rely on the government cover any shortfall. Elderly care demand is due to outstrip government funding within the next 10 years.
Our Wealth Management team can help make sure you get the retirement you want and any care you need. We’ll look at your current financial situation, help you put a plan in place, and keep it up to date as things change.
It’s not just about pensions – we’ll look at your current and future income, your property, and any other savings, assets, or investments. And we’ll plan consider for any other financial goals you have before you retire as well.
Find out more about retirement planning
While neither pension savings nor government funding could currently cover the UK’s future elderly care needs, we did find another potential source of funding.
There’s a total of £1.2 trillion currently held up in homes with spare bedrooms that are owned by people above retirement age.
If you own a home with more bedrooms than you need, downsizing could release valuable equity that can top up your pension or fund any professional care you need in the future.
"Our conveyancing system and tax regime conspire to make downsizing seem like an unattractive option. But we always make the time to explain the system carefully and advise on the best way forward for each individual."
Jeremy Raj, Partner
You can downsize to a smaller home or straight into retirement living if you’re ready.
We know that moving home is stressful, particularly if you’re leaving somewhere you’ve lived for a long time. Whatever your next step, our Conveyancing and Property experts will support you the whole way.
But we also know that downsizing isn’t right for everyone. It can impact how much inheritance tax your loved ones pay when you die, or prevent you from getting elderly care funding from the government. We’ll work with our estate planning, tax planning, and wealth management colleagues to help you decide on the best course of action for you.
Learn more about how we can help you sell your home
Estate and inheritance tax planning
Any decisions you make about planning for later life can impact the legacy you pass on to the next generation.
Downsizing to pay for care could mean that your family loses its family home. Whereas pensions are protected from inheritance tax, planning for retirement through other investments could mean your loved ones pay more inheritance tax when you die.
That’s why any advice we give is also informed by our estate and inheritance tax planning expertise.
We’ll make sure that you get a fully cohesive plan that doesn’t just cover your later years, but also what happens after.
This could mean reorganising your finances and assets, or setting up a trust to benefit your surviving family members.
Find out more about estate planning and inheritance tax planning.
There are tough decisions to make in later life however well you plan ahead. But unfortunately we won’t always be able to make these decisions ourselves as we get older and our health declines.
A Lasting Power of Attorney lets you choose someone to make important decisions on your behalf if you’re unable to make decisions yourself. It can also help prevent people taking advantage of you when your mental or physical health falter.
An LPA could cover decisions about:
- Your finances
- Your property
- Your medical care
- Where you live.
It would be tragic to plan and save for years, only for them to come undone when you’re in a vulnerable position. When your health and wellbeing are at stake, you need to know that someone’s got your back.
Without an LPA in place, your loved ones may need to go through the Court of Protection to be allowed to make decisions for you. This can be a long and expensive process.
As well as helping you plan for the future, we can make sure that plan stays in place if your decision-making ability suffers later on. We can help you nominate an Attorney of your choice, and specify what type of decisions they can make for you. We can also act as your Attorney ourselves so you get the full benefit of our experience and expertise when you need it most.
Learn more about Lasting Powers of Attorney
Don’t know where to start?
There’s a lot to think about when you’re planning for later life. Seemingly separate issues can be connected in unexpected ways, and each one needs specialist knowledge to get you the best results.
That’s why we look at the big picture.
We’ll get to know your current financial situation, how you want to spend your later years, and what legacy you want to leave when you’re gone.
We have financial advisers, estate planners, tax experts, trust solicitors and conveyancers all under one roof. That means you get efficient, joined-up support at a reasonable cost without having to shop around.
We can help you build a full plan from scratch, put it in place, and update it as and when your situation changes. Or we can advise on a specific topic, backed up by our wider expertise.
Read about our full range of later life planning services