When I was ten-years-old I always looked ahead.
I used to count down the days to my birthday, Christmas, and even weekends because I didn’t get why everything couldn’t happen right now! It’s safe to say I wasn’t the most patient child. In fact, I remember my dad telling me, after I complained winter lasted ages, that I should never wish away time. Then he told me something I’ve never forgotten. He explained that when you’re ten, a year is a tenth of your whole life but when your 50 it’s a 50th. Time goes by so fast, even though it seems like forever when you’re a child one day you turn around and you’re closer to thirty than twenty.
The other thing about time is that it’s very sneaky. Initially, you’ll give little thought to the years passing, bar an offhand comment at Christmas of ‘didn’t this year go by fast!‘ However, while your’re out there living life it’s important to remember nothing lasts forever, and the human body is not capable of sustaining life indefinitely. Nobody expects to get old after all they were just like you once- young, healthy and full of hope for the future!
No one likes to think about what might happen should their health get worse or how they’ll pay for nursing care if they’re no longer able to look after themselves. Neither do we like to think about life post-retirement because it seems so far away most of the time. Who wants to spend time thinking about that or worrying over how much money you’ve got saved for a ‘rainy day’? Well, while we agree it’s great to make the most of every moment don’t do it at the expense of sticking your head in the sand on an important decision. We’re talking about matters like writing a will, deciding POA, or Power Of Attorney and checking your pension plan.
For some reason, as soon as someone reaches ‘old-age’ topics that were completely acceptable before suddenly become awkward, or harder to discuss. Many people prefer to dodge the issue, such as life insurance, for fear of upsetting their loved one but it’s better to make sure the family understand what their wishes are. It’s easier to open up a casual discussion, over tea and cake, in the comfort of their own home than say at the hospital or nursing home when they may no longer be fully aware. Remember, we are also living longer but that fact alone suggests having a good pension, be it private, union or state is vital to ensure financial stability during retirement. According to Money Saving Expert there’s a fairly simple formula that you should rely on:
‘There’s a very rough rule of thumb for what to contribute for a comfortable retirement. Take the age you start your pension and halve it. Put this % of your pre-tax salary aside each year until you retire. Make sure you include your employer’s contribution in that percentage.’
Don’t be fooled by the happy-go-lucky idea that ‘it won’t happen to me’ because, as my dad also says, there are only two things certain in life. One is death, the other is taxes. Be prepared to expect the unexpected be it a health crisis, financial disaster or emergency home repairs. Make sure you’ve got a watertight will drawn up, to avoid probate delays, and that you’ve appointed a chief executor. It’s also worth mentioning that you don’t need to pay a fortune to create a will. Believe it or not, do-it-yourself will kits exist and are both easy to follow and popular with those looking to save money on legal fees. Be aware that if you do appoint a lawyer to draw up your will and then wish to alter the document a surcharge is normally added. Not only do wills avoid messy complications, such as contesting, but it’ll give you peace of mind that your loved ones will be looked after.
Another thing to point out is that our relationship to bricks and mortar has changed. Housing prices have skyrocketed in the last decade, there’s a national housing crisis and according to the Office Of National Statistics over three million young adults between 20-34 still live with their parents. ‘Generation Rent’ have been firmly priced out of the property market, unable to even scrape together a deposit for a mortgage because half their monthly take home pay goes on rent. It’s not just young people either, as a Spareroom.co.uk survey recently revealed:
‘Between 2009 and 2014, the number of flatsharers aged between 35 and 44 rose by 186%, according to Spareroom, the UK’s biggest flatshare website, while the number of sharers aged 45 to 54 went up by 300%.’
What could this all mean for the future? Well, if you’re a twenty-something still living with their parents or choosing to live in a ‘three generation home’ then a parent or grandparent’s declining health might eventually see the house literally sold from under you. Of course, this is a worse case scenario the same as if you were hoping to inherit property but it does happen. It might be in their will that you inherit their estate but if fees aren’t covered by the state the money needs to come from somewhere. Don’t rely on being able to live in a loved one’s vacant house, and if they live with other members of the family i.e their spouse be prepared to discuss moving them too. Nursing, and care homes aren’t cheap and sadly in this country respite care won’t be free.
Strangely, many people are quite shocked when they realise how expensive nursing homes are, after all they think ‘old people don’t do much do they?’ However, along with 24/7 professional nursing care your loved one will have somewhere safe to sleep, eat and socialise as well as staff on hand immediately if anything happens. It’s not just the social implications of moving into a nursing home prospective residents are worried about either. It’s a well-known fact that fees will eat into any savings, stocks, shares or cash marked for inheritance someone may have which is the last thing your loved one wants. Mind you, there are several options when it comes to funding and local authority help is available depending on your medical needs and what benefits you currently receive. According to Age UK, there’s a bit of a sliding scale when it comes to assessing capital, but typically it looks a little like this:
|Amount of your capital (your savings and property)||What you will have to pay|
|Over £23,250||You must pay full fees (known as being self-funding)|
|Between £14,250 and £23,250||The local authority will pay for some of your care and you will contribute to the rest|
|Less than £14,250|| This will be ignored and won’t be included in the means-test – the local authority will pay for your care. However they will still take your eligible income into account.
Photo Credit: Age UK
It might not be what they, or you would have wished for but unfortunately the sobering truth is that care home fees can cost up to £70,000 a year if nursing, or specialist care is required. Like anything else in life you have wonderful ones, and not so good places but the trick is to spot what makes a great, not just good, care home for your loved one. Age UK has a brilliant checklist you can download, print and follow or, if you like, you can watch their lovely animated video below!
We know that none of these subjects are particularly glamorous, but by talking about them openly today instead of tomorrow you’ll know if, in future, big decisions need to be made you aren’t completely at a loss. Obviously, not everything can be taken care of now but you should at least have a few notes written down. Above all, if you’re starting out in your career make sure you apply for your company pension ASAP. Older adults should check that their will is up to date, making any amendments where needed and that savings are added to so you don’t worry yourself sick should things not go to plan.