Many families often focus on how their aged relative will go about finding and funding care in later life. However, those looking after loved ones should have a financial plan of their own.
Carers need support that meets their emotional and financial needs, such as time away, help claiming benefits or keeping retirement plans on track.
There are an estimated 6.5 million carers in the nation – equivalent to one in eight adults1 – and life can be very challenging for them, both emotionally and financially. The numbers of people caring informally for aged relatives is likely to continue rising as the older generation live for longer.
The ranks of ‘sandwich carers’ – who look after both their children and an elderly parent – are expected to swell too, as the average age when Britons become parents for the first time is increasing.
The financial challenges of later-life care are often framed around the person who is being cared for and whether their assets can meet the costs – an issue that remains of huge significance to families nationwide. People worry about questions such as: do you have to sell your house to pay for care? Or does the government pay for care?
Carers themselves often experience significant financial stress. Often, they reduce their working hours or must leave their jobs entirely as they struggle with competing demands from work and family, which has huge financial implications.
There is support available if you are caring for an elderly person. We would encourage you to reach out because help is available.
What care is available for the elderly?
Carers are often rushed off their feet moving between commitments and, consequently, too many of them are left floundering on their own because they don’t know where to turn for confidential advice.
You may not feel you have any spare time at all, but even ten minutes spent browsing the website of a reputable group can help you feel supported and informed about the wider issues around care. Good places to start include Age UK, the charity for older people, and Carers UK, which aims to improve life for carers.
Obtaining financial advice
Financial advisers are experts in tax and inheritance matters. Yet much of their work also involves helping individuals and families find appropriate care, meet the cost of it and manage life’s big transitions. This includes helping people who have become unpaid carers.
A good adviser will be able to answer your questions around care – including how much home care costs per hour or whether next of kin are responsible for care-home fees. This can be reassuring and help families with forward planning. But just as important is an adviser’s ability to explain what’s possible from a carer’s perspective. For example, a cashflow plan could show that a family could factor some practical help with caring into their budget. Sometimes financial assets can be managed more effectively to pay off a mortgage, reduce debts or create an income stream.
While the financial and emotional burden of care involves the whole family, unpaid carers can benefit from a session with a financial adviser individually. Carers are on their own, often challenging, journey.
At times, their own needs may have taken a backseat – for example, their carefully laid retirement plans may need a boost, or their hopes of supporting their children with their dreams may be easier to accomplish than previously thought.
Many family carers have checked the financial status of their elderly relative with regards to their entitlement to help with care costs. Since most people who own a home or have some savings are required to self-fund their care, carers sometimes assume that they personally aren’t entitled to any financial support.
This may not be the case, especially if it’s been some time since you checked, as entitlement to some state benefits may begin after a period of time has elapsed or the parent’s needs have changed. Discussions of this nature need to take place early on and are worthy of a refresher after some time has passed.
For some families bringing in professional carers on a temporary basis (either in the home or through residential care) may be an option, which will give unpaid carers a break.
Our advisers can outline how much you can expect to pay for care either at home or in a care home based on the individual’s needs. They can advise on managing costs and anticipating any issues that could arise.
Power of attorney
There are two main types of power of attorney that families can legally obtain to support their parents – one for financial decisions and one for health and care.
Each of these legal agreements gives named individuals the power to make decisions on behalf of the other person. They’re important for carers, because it can otherwise be difficult to provide the support you would like. For example, as a parent’s health declines, they may need specialist care but lack the capacity to make that decision for themselves. A power of attorney can make this process easier.
People associate power of attorneys with end-of-life care and while they’re often used in that context, it can save a lot of upset if they’re set up well in advance.
Advocating for carers
Unpaid carers sometimes feel as though their lives are on hold. They may have stepped in unexpectedly and delayed their own plans for paying off a mortgage, saving or having holidays – usually on top of reducing working hours and commitment to passions and life goals.
At times, people in the wider family may have input into the status of the elderly parent, including whether they receive paid or informal care, go into a home and so forth. Their perspective may conflict with the carer’s, both in terms of what should happen to their parent and how much should be spent on their care.
Other family members can sometimes have an eye on inheritance – understandably, given the financial pressures of modern life – and a neutral third-party such as a financial adviser may be needed to step in.
We can help you manage the issues around caring for elderly relatives, so speak to us today.
1 Facts & Figures, Carers UK, accessed May 2022