How much money do you need when you're old, really old?

 July 2022 

I’ve been helping out my sister and my mother recently; like many in their early sixties, I’ve also been looking at my finances, and trying to work out what I might need in the future. 

My mum’s situation has given me food for thought - serious thought. After nearly thirty years of retirement she found herself in hospital at the tender age of 89, and the doctors declared her medically fit for discharge - which sounds fine, but she’s really struggling with her mobility.

The hospital and social services between them agreed her discharge was ok; social services proposed she should be at home, with four care visits a day to help with meals and dressing.

That, basically, is what our health and social care system might provide for you when you’re old and unable to look after yourself. 

With the experience I’ve had with Viv, I was horrified - as was my sister. My mum has lived alone for the last twenty five years in a tiny, one bedroom bungalow (that was once part of a sheltered accommodation unit until the council sold off the warden’s house to help boost their funds).

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I know what care visits are like and what those planned for my mum would have involved. Carers have little time; usually half an hour per visit. In that time they have to read the file telling them what to do, then clean up the resident, including taking them to the loo (or commode), perhaps dress them, sort out food for them, leave the place clean and tidy and make notes in the file recording what they found and what they did.

My mum being unable to walk, and there being no space for equipment in her bungalow, it is unlikely she would ever have got out of her bedroom. She certainly wouldn’t have been able to get out of her bedroom on her own; for the loo, she might have been able to use a commode in there, which would have had to be emptied by the carers.  

If things were bad, she might have ended up soiling herself, and lying in it until the next care visit. If she needed incontinence pads, they would be provided: three per day. That’s right, the powers that be say you can have three pads a day if you need them, leaving an awful lot of time spent sitting or lying in unpleasant stuff. I don’t know about you, but if I need to go, even now, I can’t hang on for perhaps four hours, so would have no chance waiting for the next carer visit.

She has no TV in her bedroom; her monotonous day would have been spent with the radio, lying on the bed, waiting for the carers.

And, as any user of care services will tell you, care providers sometimes struggle to keep to schedules (especially at weekends). It's quite possible my mum would, on occasions, have had to go from 7pm one evening to 10am the next day between visits. That’s a long time to wait for help if you need cleaning up, or something to drink.

‘Crippled and useless’ is a term that used to be used in China for the disabled, and sums up well how my mum must feel at the moment; she is probably kicking herself for doing as she thought she was told by the government two years ago, ‘Stay at Home, Protect the NHS’.

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Fortunately, she’s not going to be stuck at home waiting for carers all day. My sister had a chat with a social worker at the hospital about their plans, and asked the simple question: ‘If my mum pays for it, would it be ok for her to go into residential care?’

‘If you pay, you can do anything, so long as it's safe and reasonable’, came the answer.

So we had a chat with my mum, and she came around to the idea that she’d be better off in a care home. We found her a place at one in her village, and, in fact, she moved in a day or two ago.

She is, of course, ‘self-funding’; that is only possible because she has sufficient in a savings account to pay the fees for residential care for over a year. If she hadn’t put aside a bit here and there in the past, she’d have to settle for the four carers a day at home option.

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Indeed, what has become very apparent is that it's a good thing that my mum had not done what some people do in their seventies; she had not spent almost all of her savings on holidays and travel, or given it away to family to help youngsters on the property ladder. Another couple I knew even put their home into trust, supposedly so that they would not have to pay for social care in their old age; one died in 2006, the other last year, and at that time they had just £12000 to their name. They would not have had to pay for care had they needed it, but what they clearly did not consider was that if you are dependent upon social services funding your care you will get whatever care social services arrange for you - in your home, or in a care home which might be miles away from your home, or your family. If they had needed care they, and their family, would have had little say in what they got and where they got it. 

We all have our ideas on what we want for our old age: I, I have decided, want to be able to choose what sort of care I get (if I get to the point of needing it); to this end, I am planning my finances so that (hopefully) there will be a pot of money available for me at the time, so I will be able to arrange something that I like. 

In my case, that’s not too difficult to plan - I have modern defined contribution pensions from which I draw down what I need to live on. It does mean a lot of spreadsheet work, and checking to make sure I get the most out of the state pension, but such planning is not something that is way beyond my capabilities. 

There are those, however - perhaps who have never been self employed - who rely upon defined benefit pensions. These are supposed to be the ‘gold standard’ of pensions, and in some way they are (for the risk is taken by the employer), but the problem with these is that beneficiaries often have little experience of planning their own finances, and they’re told that, when they retire, they will get so much a month to live on. It may seem quite a lot, which might tempt them to think about expensive holidays; they may not realise they’ll need to put money aside, for that rainy day when suddenly you find you need care.

And so, the big question: how much might be needed at the time you’re told that you need help? 

A place in a residential care home now costs around £1000 a week (not the £600 a week the nhs.uk website says!). To be realistic, you probably need enough to last a couple of years - a nice round figure, at today’s prices, is £100K. 

So, for retirement planning, on top of the income that you need to live on post retirement for all those years you’ll be enjoying yourself with hobbies, interests, socialising and travel, you’ll need to have another £100K to fund your care for the last couple of years or so of life when you can’t really look after yourself. 

And how much are you putting away in a pension pot every month?