None of us like to think about the day when we’ll no longer be able to look after ourselves – not only because it’s a scary thought, but we have enough things to worry about in the present day, without thinking about the future.
But, with life expectancy soaring into the late 80s by 2030, the majority of us will to have to live with old age for longer. Which means the cost of retirement healthcare increases with every year you live and your pension will need to go further than ever – so planning for retirement care can’t begin too soon.
Depending on others no longer works
The average Brit is expected to enjoy roughly 65 years of good health, which leaves around 20 years where some kind of healthcare will be needed. Sadly, the NHS is at breaking point and the spiralling cost of elderly care means responsibility often falls on family members. However, an IPPR study says 2 million over-65s in the UK will have nobody to care for them by 2030.
Meanwhile, the rise of the ‘sandwich generation’ sees more middle aged people in the UK looking after elderly relatives, as well as their own children – 2.4 million, according to Aviva (PDF). So when state healthcare and families are both pushed to their limit, the only option left is for us to take responsibility for our own retirement care.
Planning for retirement care
The trouble is care for the elderly is incredibly expensive. In Norfolk the average cost of a care home is £522.69 per week, while £161.95 is the weekly rate for care provided at your own home (find your local averages here).
You can use a retirement budget calculator, for a more accurate idea of how much money you’ll need later on in life and an income calculator to work out your pension contributions or seek financial advice to help you reach your target figure – the important point is you start planning early and look at all your options.
Avoiding the care crisis
While the overall cost of retirement care may come as a shock, it’s a wake-up call that gives you the best chance of generating the funds without selling your home. Regular financial advice will also keep you up to date with all of your entitlements and the options you have available to fund your own retirement care – all of which can change over time.
The government has made changes designed to make care more affordable, but the truth is they don’t even come close to solving the problem. In fact, they are quite misleading and many could find themselves coming up short, only to realise when it’s too late.
All this means the only guaranteed way to avoid the care crisis yourself is to take control of your own retirement funds and find a way to generate the money you’ll need to make it through retirement.