Do you remember saving up for a toy as a child? Saving was pretty straightforward then – you knew what the price tag was so you knew what your goal was.
Saving as an adult is somewhat harder. It can be difficult to resist spending now on the basis of some hypothetical scenario that might never happen when balanced against the gadget or holiday you want now. You might even wonder why you should bother if it’s just going to be eaten up in care costs in later life.
Paying for care means you get to choose your care
The threshold above which you have to pay for later life care is £23,250 (or £23,750 in Wales) and, since care costs, regardless of whether they are home care services or in a residential facility, start at around £500 per week it can be tempting to give away assets to bring yourself under that threshold.
However, paying for your care means you get to be involved in choosing it. You can decide whether you want to spend your £500 on moving into a care home or whether you would rather spend it on a live in care assistant because you want to remain in your own home with your own pets and near your family.
Savings mean you aren’t forced to do anything
Having extra savings to cover care costs means you won’t be forced to sell the family home, or mortgage it, or defer payments or use any other type of loan arrangement to meet the costs of care.
The means-tested threshold will exclude your home in certain circumstances, but for many who haven’t taken the time to plan and save for their care costs it will ultimately need to be sold to cover the shortfall. Savings could make the difference between bequeathing a property you own outright and bequeathing a raft of legal obligations and charges.
Savings don’t have to be used on care
If you amass a healthy nest egg you can also choose to use your savings on improving your quality of life, for example by taking winter sun breaks or to visit grandchildren. It also means you have the flexibility to decide that you’ll use your savings for private health treatment, for example to obtain a hip or knee replacement faster than at your local hospital. It could make the difference between spending your last years mobile and immobile with all the knock-on effects such as depression, worsening of heart conditions and risk of stroke that losing your mobility brings.
Providing for your own later life care means you can predict what will happen. You won’t be at the mercy of Governmental policies and you won’t have to rely on your family to plug any shortfall. A few pounds saved now could add up to a lot less worry and stress in a few years time, both for you and your family.