Later Life Planning

Many people in later life have been as affected if not more by the current economic downturn as anyone else. People are living longer and looking closer at their retirement, particularly around whether they will have enough funds to enjoy a comfortable standard of living in the third trimester of their lives – a time in life where for many, enjoyment and exploration become a core focus.

I have a large proportion of clients who are retired or of retirement age and require assistance on estate planning, care fees, equity release or advice on their pensions and investments.

It is vitally important that clients reach out to receive the right advice when approaching the complexities of later life, it is never to early to start planning. I would encourage you to start discussions with your adviser if you haven’t already done so.

A lot of clients who decide or end up having to live in a care home often have to sell their assets or their home, potentially leaving them with a large amount of money in the bank account.

A client of mine recently had just this scenario where the property had been sold, care home fees were high and my client did not have enough to pay for these fees each month. A lot of the money in the bank account however, would not have been needed for at least five years, even taking into account the care home fees which were being paid.

Although my client was in her 80s, the family who were also acting as her power of attorney, did not want a considerable amount of money sitting in a bank account earning very little interest. Therefore, it was important to ensure that they had the right advice on suitable investment options for some of this money.

The first thing that was important to consider, was to ensure that enough money was left in available accounts to pay the care home fees for the short-term. Once they knew there was a short-term plan in place, they were able to consider longer-term options for part of the money released from house sale.

One of the main concerns we discussed in this case was in the event of the client passing away during a period of poor stock market performance, whether the client’s family would be forced to encash the investment at an inopportune time.

One way around this issue is to set up an investment bond with the family members who are also acting as power of attorney, as lives assured on this bond. This would effectively allow the investment to continue in the event of my client’s death, therefore, if this had happened during a market downturn, the funds would not need to be encashed and could remain invested until a more appropriate time.

This will likely attract much higher potential growth compared to a bank account and will also allow the family to choose when to access this money in the event of my client’s death. Not only this, but there is the ability to start taking a regular income from this kind of investment, as a tax deferred withdrawal, should it be required.

There are many strategies and products available for clients approaching later life planning that Integrity365 can assist with. If you would like any further information or an adviser to contact you, please get in touch on 0117 450 1300.