18 October 2017
When family finances and retirement hopes are shattered by dementia
Having saved their whole working life, your client has counted down the years to retirement, looking forward to paying off their mortgage and taking advantage of pension freedoms. Their golden years are just around the corner.
But then there’s the devastating diagnosis that they’re developing Alzheimer’s, the most common form of dementia.
It’s a complex, unpredictable and degenerative health condition caused by disease in the brain. Yet, unlike cancer or heart disease, dementia cannot be cured or effectively treated.
The biggest support to people with the disease comes from help with basic daily needs such as washing, dressing and eating, rather than medical treatment available under the NHS. They become progressively dependent on what can be expensive personal and social care.
Sadly, instead of spending their hard-saved pension and any other investments on the retirement they’d hoped for, as well as any plans to provide financially for their family, they‘re now left with little choice but to utilise these assets, along with (in many cases) any built-up equity in their home to pay the required £850-£1000+ per week for care or a place in a residential home.
As our society ages, the number of people being diagnosed with dementia in the UK is rising sharply. As a result, care needs and costs are spiraling. This is stretching the resources and finances of families and local authorities alike.
According to the Alzheimer’s Society, there are 850,000 people with dementia in the UK.This number is set to rise to over one million by 2025 and will soar to two million by 2051.
One in six people over the age of 80 in the UK have the condition. However it’s important to note that dementia is not just a disease which affects the elderly. An estimated 43,000 people are suffering from early-onset dementia, which starts before the age of 65 – not even state retirement age for many of us of working age today. And the number of people diagnosed with early-onset dementia has increased sharply in the last 10 years, due to our ageing population and improved diagnosis.
This is where the role of appropriate financial protection can come into its own.
Critical illness cover can provide a significant financial boost to families at a time of emotional and financial stress. And support services such as RedArc can also provide much needed emotional and practical support, and not just to the person suffering from the illness. The family or partner, who may be feeling pressure from performing a care role, can also access support.
Yet, despite this, only one in ten of us have taken out a critical illness policy.
It’s also worth speaking to clients about the need for, and benefits of, Lasting Power of Attorney should the nature of their health mean that they lack contractual capability and the ability to manage their financial affairs.