According to the Alzheimer’s Society, there are currently around 850,000 people with dementia in the UK. That figure is set to rise to 1.6 million by 2040.
Rising cases mean an increase in those requiring care. Currently, 70% of people in UK care homes have dementia or severe memory problems.
With two-thirds of the cost of dementia being paid for by the individual and their families, the potential costs of later life care must be factored into all our financial plans.
There are some other steps you can take too, helping to maintain the financial security of a loved one if they receive a dementia diagnosis.
Here are three small steps you can take and how financial advice can help.
1. Create an “ICE” document
An “In Case of Emergency” document is a place to store everything someone might need to know in an emergency. Speak to your loved ones and find out if they have one. If not, help them compile one.
Bank account details, insurance documents, and the names of solicitors and financial advisers should all be listed. Important documents such as birth certificate and passport should be kept here too, or at the least, a section confirming where they can be found.
Talking about money can be difficult. While helping to put together a loved one’s ICE document, you might take the opportunity to discuss financial matters.
Does your loved one currently have an adviser? Do they have a will? Do they have a Lasting Power of Attorney (LPA) and if not, do they know who they would like to look after their affairs if they become unable to? Do they have money put aside to help fund the cost of later-life care?
It is important to get the answers to all these questions early so that together you can put plans in place.
2. Help to put an LPA in place
An LPA is a legal document your loved one can use to set out who they would like to look after their affairs if they are no longer able to. There are two main types:
- A Health and Welfare LPA – This can cover a person’s daily routine, medical treatment, and decisions about their wellbeing, such as whether a move into care is necessary.
- A Property and Financial Affairs LPA – This allows a chosen attorney to look after money matters, such as paying bills, and collecting benefits.
An attorney can only be appointed by someone who has the mental capacity to do so. This means that a parent or loved one able to make their own decisions has full control over who will manage their affairs.
More than one attorney can be appointed, and stipulations can be added to specify the exact areas in which each attorney can act. Picking someone they trust to look after their affairs will give your loved one peace of mind.
You will have confidence too, that their affairs will be looked after in a way that aligns with their wishes.
3. Considering the cost of care
Social care is means-tested. If a loved one owns assets of more than £23,250 (in England and Northern Ireland) they will not receive any local authority support. That means the cost of care will need to be privately funded.
The average cost of care home fees for those self-funding is around £1,000 per week, so the funds must be there when they are needed.
Talking to a loved one early has several advantages:
- Knowing how much it will cost
Knowing the type of care your loved one would like is the first step in knowing whether it is affordable. If they have a financial adviser and a retirement plan in place, there will likely be provision to cover the cost of later-life care.
- Understanding all the options
There are different types of care available and the right one for your loved one will depend on their individual circumstances at any given point.
In its early stages, dementia might allow for home care visits or a move to sheltered accommodation. If a loved one is unable to live independently, residential care might become the best option.
- Peace of mind
Although it isn’t a topic any of us want to think about, having the conversation could give a loved one peace of mind that their wishes have been heard. An early conversation might also give you the confidence that everything is in place to make those wishes a reality.
Get in touch
The NHS suggests that one in three of us will care for someone with dementia in our lifetimes. Putting plans in place to cover the cost of later life care, either for yourself or a loved one, is vital.
We can help you put a financial plan in place to give you peace of mind that your care costs are covered. If you find yourself caring for a loved one, we can help too, mitigating the impact of that care on your long-term financial plans.
If you’d like to speak to us, get in touch. Email at email@example.com or call 0800 0787 182.