Angela and John became clients of Julie’s nearly 20 years ago. John had just retired and they had a lump sum they wanted to invest. John had been used to dabbling with his own share portfolio with some mediocre success, but as they now wanted to travel and enjoy their retirement with few responsibilities, they also wanted to find someone they trusted to manage their money.
John and Angela attended one of Julie’s seminars about Financial Planning and soon realised that they didn’t just want someone to invest their money, they wanted someone to help them plan their retirement years so they didn’t have to worry about running out of money or paying too much tax.
Armed with their first ever lifetime cashflow forecast, they felt reassured that they had enough money (both income and capital) to enjoy their retirement and set about spending it on travel and their wonderful garden.
However, Julie pointed out that their comfortable lifestyle could be scuppered if either of them needed nursing care as this would significantly erode their funds.
Julie recommended that they each set aside some funds into a nursing care plan, which would pay a regular amount towards care costs in the future thus securing their overall position for ever.
So fast forward 12 years during which John and Angela enjoyed some wonderful trips and holidays and the wedding of their daughter. Then out of the blue John started to feel unwell and tests concluded that one of his kidneys was failing. 18 months later his other kidney stopped working and John needed full dialysis.
This was a big shock to this otherwise fit and lively couple, as John’s treatment confined him to hospital and later to home dialysis. Throughout this time we were able to offer our support and help them to find alternative short break holidays where John’s needs could be met comfortably with no fuss.
As they had cut back on their spending, they were accumulating capital and so we helped to design gifting strategies to pass funds to their daughter and any grandchildren. This also reduced the value of their estate for Inheritance Tax purposes and allowed them to see the benefits of passing money to the next generation while they are still alive, rather than just leaving it in their wills.
We met John and Angela for their annual planning meeting in September and unfortunately John, now in his mid 80’s, is starting to suffer from the severe effects of kidney failure and can no longer feel his lower legs. This has inevitably put a great strain on Angela who does her best to look after her husband of 46+ years and as she is 74 herself, being a full time carer is starting to take a toll on her health too.
Now is the time to look at how we can help specifically with care for John and some respite for Angela. Thankfully, they are pragmatic people and have already looked at nursing homes where John can be cared for for short periods while Angela has a rest. Their preference is understandably for John to remain at home for as long as possible, but he is a tall man and Angela will need help.
We now need to look at the care plan they purchased many years ago and how that can provide funds for extra care and mechanical assistance for John around their home.
Sadly these pre-funded care plans are no longer available, but for John and Angela, their plan has already provided funds for a stair lift and some grab rails to help John’s mobility. Because John can no longer dress or toilet himself and needs assistance moving around, his care plan will pay nearly £15 000 per year (index linked) to a carer to help look after him at home for the rest of his life.
This might sound like a rather grim story of failing health and old age, but John and Angela (and their wider family) are now so happy and relieved that much of the stress of caring for John has been taken away, that they can start enjoying their life again. But John and Angela were lucky that pre-funded nursing care plans were available for them. As this is no longer the case, it is critical that people set aside funds to ensure they remain comfortable and secure throughout their older years. Of course there is often a conflict between giving money away to save tax and keeping enough to pay for a good quality of care.
At Magenta we can help our clients to plan and prioritise to ensure that their later years are not difficult or uncertain.