Finances for the Future: Why is it important to plan ahead?
Funding your care is not always easy, and planning finances in a care home is not something you can prepare for in a day. It’s never too early to make the necessary preparations for your future, both for you and your loved ones’ peace of mind. But where should you start? Whilst there’s no set process to follow, we’ve shared some insights into certain things to be aware of, and how to incorporate this in your future planning.
Why should I start planning my finances?
The simplest reason: care homes are expensive. Without proper financial planning, individuals will find themselves quickly overwhelmed by the cost of the care home, leading to stress. This financial strain can quickly spread to family members, as costs can be delegated to your loved ones.
Having long-term savings also helps maintain your independence. It takes the financial responsibility off your loved ones, and it can offer you a choice in your care home. When difficult decisions are being made, it can be comforting to know you have some financial freedom.
When should I start planning my finances?
People work on different timelines, but we would suggest the earlier the better. Not only does this build long-term comfort and confidence in your financial future, but it can also help you navigate things out of your control.
A common example of this is a change in government, or new legislation introduced. The previous government had plans to introduce a cap for personal care costs, which would have altered the way financial assessments were conducted. However, the recent election of a different government means these changes are not taking place for now. It is external events such as these that will ultimately impact your care home fees, so it’s best to have yourself prepared for any outcome.
As well as a change in external environment, there’s also a possibility of internal change. Health conditions, such as Alzheimer’s disease, can arise unexpectedly, creating higher levels of care and therefore increased costs. As we age, our needs can change, and it’s important to have the funds to ensure these needs can be met properly.
How should I start planning my finances?
Planning the transition into a care home requires many steps, and you must consider funding throughout the process. This can come from a combination of different sources, and it’s important to know the level of your personal contribution in comparison to the support of your local authority. For Birchwood House, this is Kent County Council. Currently, you will not qualify for any financial assistance if you have over £23,250 in capital, so it may be beneficial to consult with a financial adviser after your financial assessment is conducted. This would also be a good time to discuss care annuities and insurance, as this is another potential option.
To explore your full range of options, or to find out more information on care home funding, we’ve created a page dedicated to frequently asked questions. And for any other queries, get in touch today.
The information shared above is general and for informational purposes only – it is not intended to be personal financial advice, and Birchwood House cannot be held liable for any actions you take as a result of anything you read here. Before making any decisions, we encourage everyone to conduct their own due diligence, and/or consult an independent financial advisor or licensed professional to advise on these matters where appropriate.
