london (PRWEB UK) 24 April 2014
In a bid to help people plan their finances more effectively, Pensions Minister Steve Webb has announced plans to introduce ‘life expectancy guidance’ to pensioners, alerting them to the fact that a longer life needs greater financial planning.
Whether the nation is ready for these cold hard facts is debateable and there is a danger that supposition based on averages may still leave people financially ill prepared however one thing is for certain according to Ashley Shepherd, Managing Director of personal finance website Over50choices, the nation urgently needs to start planning for later life.
The latest figures from the Office for National Statistics (ONS) suggest we are living longer lives, extending the length of time we spend in retirement. 65 year old men and women have a life expectancy to 83 and 85.6 respectively, so greater thought needs to be given to how these longer periods of retirement will be funded, especially when taking into account additional costs such as medical fees, nursing care and increasing funeral costs.
Already an advocate of the emotional and financial benefits of funeral planning, Ashley Shepherd warns that people need to think carefully about how they will fund their later years much earlier on in life.
“Whilst increased life expectancy is a good thing, it does come with associated complications such as the need for increased medical attention and demand for nursing facilities; all of which come at a cost.
The cost of a care home alone is typically between £28,500 and £37,500 a year, depending on where you live and whether nursing care is required. The average age of a person entering a care home is currently 84, staying for approximately 22 months. In this common place scenario you would be looking at overall costs of around £60,000.
Until the Government’s Social Care Bill is passed in 2015, it is unlikely that plans will be developed to assist with these associated costs as insurers are just too nervous to create new products until the Bill is finalised, so we do need to take matters into our own hands.
Planning for the future gives you the opportunity to have a say in how you are cared for; ensures your retirement years are comfortable ones and helps protect the futures of the people you care about so it is vital we change the way we think about ageing.
It’s the chicken and egg scenario of life and death; does your money run out before you die or do you die before your money runs out? I know which one I’d prefer."
For more information on financial planning for the Over 50s, visit Over50choices.