There are certain conversations most of us quietly postpone. We tell ourselves we will deal with them “later”, the same way we promise to sort the garage, write a will or finally understand how our pension works. Illness, particularly in later life, tends to fall squarely into that category. Important, unavoidable, and all too easy to ignore.
But, as people are living longer, the reality is that you’ll inevitably have to face this uncomfortable truth – whether for yourself, or for a loved one.
A recent report shows that while life expectancy has increased over time, healthy life expectancy – the number of years we live in good health – has actually declined for both men and women in the UK. This means more people are likely to spend a greater portion of later life managing illness or reduced independence, often with financial implications that need careful planning.
Despite these sobering figures, the good news is that there are practical steps you can take now to make a meaningful difference later in life.
1. Putting the right people in charge: Lasting Power of Attorney
One of the simplest and most overlooked pieces of planning is deciding who can act on your behalf if you cannot.
A Lasting Power of Attorney (LPA) allows you to designate a nominated person or people to make decisions on your behalf.
There are two types of LPA:
- Health and welfare LPA – Gives your attorney the power to make decisions for your health, including starting or stopping a specific treatment, managing your daily routine, or moving you into a care home.
- Property and financial affairs LPA – Gives your attorney the power to manage your finances, including accessing your bank and savings accounts, making insurance claims, paying your bills, collecting your pension and/or benefits, and selling your home.
If you have both LPAs in place and do fall ill, someone you trust will be able to act in your best interests. Crucially, if you lose mental capacity, you can’t register either type of LPA subsequently, so it’s a task to tackle sooner rather than later.
2. Set aside some of your savings for later-life care
Care is expensive. Not occasionally, but consistently. Even if you are lucky enough to maintain your health, longer life expectancy means that it’s more than likely we’ll need some form of care. That might mean occasional support at home or full-time residential care.
Three tips for setting money aside:
- Use cashflow modelling software to model how much you can afford to put aside.
- Ensure you’re saving or investing the money efficiently, giving it the greatest chance of growing in line with rising care costs.
- Talk to your family about where the money is (for example, if some of your wealth is tied up in your home, it may need to be sold to pay for care).
As uncomfortable as it might be, planning ahead can make a significant difference to how easily you’re able to meet future care costs. Too often, we see families forced into difficult, time-sensitive decisions, whether that’s selling assets quickly or restructuring finances under pressure. With a plan in place, those same decisions can be approached proactively, reducing stress and allowing for more considered, deliberate choices.
3. Ensure you put appropriate protection in place
If you were diagnosed with an illness while you’re still earning, it could seriously impact your day-to-day finances. Similarly, needing care in retirement could deplete your savings and investments faster than you’d anticipated.
Appropriate protection could help to lessen the financial blow.
- Critical illness protection offers a one-off lump sum for those diagnosed with an eligible illness, or who become critically injured. Having this in place could reduce your family’s stress if you were diagnosed with a lasting illness.
- Income protection insurance offers ongoing payments up to 60% of your usual income. You could use these payments to help cover household essentials without using your savings or investments.
- Life insurance, if you are terminally ill, may offer an early, tax-free payout to help your family cover immediate costs.
Financial planning in later life is rarely about a single decision. It is about creating a structure that is flexible and suits your needs. This might include setting aside funds for care, ensuring your investments are aligned with future needs or thinking carefully about how your wealth passes to the next generation. It may also involve more complex considerations, but at its core, it comes back to a simple principle: removing uncertainty where possible. Because, let’s be honest, we never really know what’s around the corner.
Get in touch
If you’re supporting someone with an illness later in life, or if you’re already planning ahead for your own future, we’re here to help. You can contact us by emailing info@titanwci.com or calling us on 01534 724241, and a member of our team will be happy to speak with you.
