How much could later-life care cost you and how could you avoid this affecting the inheritance you leave for loved ones?

Scientific advances have meant that more people are living to the age of 100 and beyond than ever before.

But while life expectancy has increased in recent decades, the number of years that you are likely to spend in good health haven’t quite kept up with the progress. So, there’s a chance that you may need later-life care as you grow older.

Depending on the level of care that you need and your personal circumstances, this can come with a hefty price tag. So it may be sensible to factor this potential cost into your financial plan.

Read on to find out how you could manage the potential cost of later-life care while still achieving your goals, such as leaving a legacy for your loved ones after you’re gone.

In 2024, residential care could cost you around £1,500 a week, but this varies between regions

The cost of later-life care varies depending on several factors, including:

• Where you live
• The level of care you require
• How much you own in savings and assets
• Whether you wish to receive care at home or want to move into a care facility.

Lottie reports that, in London, the average weekly cost of care if you are self-funding in 2024 is:

• £1,383 for residential care
• £1,607 for nursing home care
• £1,469 for residential dementia care.

As you can see, even if you only require care for a few years, the cost could quickly erode your savings.

Without careful planning, the cost of care could reduce the amount you’re able to pass on to loved ones as an inheritance

You’ll only be eligible for financial support from the local authority if the value of your assets is below £23,250 in 2024/25.

As you can see from the data above, this can mean paying a significant fee for any care that you require. Over time, this could deplete your savings and assets, affecting how much you are able to leave to loved ones after you pass away.

You may be tempted to try and overcome this problem by gifting your wealth to family during your lifetime.

However, this may not be the most sensible strategy if you are gifting specifically to reduce the value of your estate for the purposes of becoming eligible for financial support with the cost of care. It’s a practice known as “deprivation of assets”, and if the authorities suspect you have done this, they will count the gifted assets in their calculation of your eligibility.

Your financial planner could help you to plan for the cost of care so that you can still achieve your goals

If leaving a legacy is a priority for you, it’s sensible to factor in the cost of care to your financial plan so that you could still achieve your goals. Additionally, reflect on your top priorities so that you can plan in alignment with your values.

For example, how important is it to you to be able to pass your family home on to your beneficiaries? If this is a priority, you might consider using savings and investments to cover the cost of your care. But if your home is less of a priority, downsizing could be a helpful way to unlock equity from your home to cover the cost.

Your financial planner can help you to create a plan that helps you to cover the potential cost of care and protect the legacy you’ll leave your beneficiaries. They can also make sure that your top priorities are taken into account.

Get in touch

For more information about how I can support you in creating a financial plan that provides peace of mind and practical support for you and your family, please get in touch.

Email Marnel.Stafford@fosterdenovo.com or call 07305 970959 or 0207 469 2800 to find out more about how I can help you.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

The Financial Conduct Authority does not regulate estate planning.

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.