Why saving for long term care is essential, not optional
LONG-TERM care may seem a lifetime away - especially when you’re fit and healthy - but figures from the UK government show that around three in four people will require some form of care in later life1.
The UK’s population is ageing at a rapid pace. The International Longevity Centre estimates that the number of people aged 65 and over is set to increase from 11.2 million today to a staggering 17.2 million by 20402.
Long-term care is not the sunniest of topics and it’s likely to be one of the last things on your mind. Saving money for when you could be sick in the distant future? Well, there are always more pressing things to put your money towards, right? But saving for long-term care is not optional - it’s a necessity.
And it’s especially important for women. Although don’t get me wrong - it isn’t restricted to just women - both men and women should save accordingly.
Fidelity’s latest Women and Money research found that just 5% of women have a financial plan in place to help them cover the cost of care later in life, while over 18 million (69%) of women have not considered this at all.
And shockingly, one in four (24%) women aged 55 and over - equivalent to 2.6 million approaching retirement, don’t think they’ll be able to afford their later life care needs3.
Of course, it’s understandable. Nowadays there are so many things to save for.
Once you’ve ticked off home renovation, your pension, saving for your children - long-term care tends to drop to the bottom of the list.
And it’s expensive. Really expensive. So, it’s something we all need to consider.
Figures published by a consultation outcome from the government suggest that one in seven people in England are expected to face care costs of more than £100,000 and one in 10 over £120,0001.
It might not come as a surprise that one of the best ways to cover these expenses is to save regularly. Ensure you are part of a workplace pension scheme if you’re eligible, contribute to your personal pension and other long-term savings and seek advice for the more complex aspects of financial planning. These are all the necessary foundations for building future financial security.
Emma-Lou Montgomery, associate director at Fidelity International said: “They say the best time to fix the roof is when the sun is shining. So those all-important years when you’re earning and accumulating your retirement pot are also the best time to be planning for any potential care you may need when you’re older.”
She emphasises that when it comes to care, it’s far better to overprepare than leave it to chance.
If you’re far from retiring, trying to predict your care needs is near impossible. But what we do know is that people are living longer than ever before and are increasingly likely to require some form of assistance in later life.
“Navigating the financial side of long-term care is undoubtedly daunting - there’s a lot to consider, particularly if the need is urgent. While you can’t control when this time may come, taking steps sooner and ensuring you have sufficient savings to draw upon can help to provide some peace of mind,” said Emma-Lou.
Making sure your potential future care needs are met requires careful financial planning. It’s not a pleasant thing to think about, but having a plan and time on your side means you are as financially resilient as you possibly can be.
- Gov.uk, 16 Jan 2023
- The International Longevity Centre, 1.11.2022
- Research was conducted by Opinium Research commissioned by Fidelity International. The survey is based on a nationally representative sample of 2,000 UK adults. Fieldwork ran from 15 to 20 December 2022.
Important information - this is for information purposes only and the views contained are not to be taken as advice or a recommendation for any product, service or course of action. You should regularly reassess the suitability of your investments to ensure they continue to meet your attitude to risk and investment goals. You cannot normally access your pension savings until age 55. This is due to rise to 57 in 2028. If you need advice about how any of this information applies to you personally, you should contact an authorised financial adviser.
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