How to make finances add up when you are an unpaid carer: Sarah Coles
I remember when getting together with friends or colleagues and chatting about what they got up to at the weekend was more fun. At least one person would still be nursing a hangover, and the rest would have tales of wild nights out and lost shoes. Nowadays, we’re sharing tales of older relatives: the nursing is of another kind entirely, and the lost shoes part of a much sadder picture.
My friends and I aren’t unusual. The most recent Census shows there are actually five million unpaid carers in England and Wales – three million of whom are women. The most common ages to be providing care are between 40 and 69 – peaking in our late 50s. Given their age, significant numbers of these carers will also be looking after children living at home, which is why the Office for National Statistics puts the number of sandwich carers at just under 1.5 million.
Care puts an enormous strain on every part of your life – from your mental and physical health to your finances and relationships. There are no easy solutions, but if you’re entering a time of life when care is looking increasingly likely, there are some preparations you can make.
It starts with a conversation with the person who is likely to need care, to get an idea of where they would like to live and what kind of help they want. You might not be able to meet all their needs, but it helps to know what you’re ideally aiming for.
The next step is to talk to the wider family about the level of support they can provide. Without this step, there can be an assumption that a family member who has been more hands-on in the past should be in the frame again, or that the person who lives closest should do the bulk of the caring. None of these things are written in stone, so they need to be discussed.
You need to consider the finances at this point. If they need professional care, this comes at a cost. In the case of a nursing home or residential care, it can be eye-watering. The whole family needs to appreciate the difficult choices this will involve, so none of them are surprised if, for example, you need to sell their home to pay for care.
If the person who needs care wants a family member to step in, this also comes with a financial cost. People providing care are more likely than non-carers to work part time – 38% of them do so. Even those who manage to work full time may end up with other career compromises. According to Carers UK, a fifth of carers make a more junior role to juggle it with looking after loved ones. If one or more of you are making career sacrifices, or can’t make enough money to make ends meet, the rest of the family need to consider how they can be supported.
You also need to get the paperwork sorted in advance, which should include a Lasting Power of Attorney. They need to have mental capacity (the ability to make decisions) when it’s drawn up, and the best way to make sure this is the case is to do it before they ever expect to use it.
The idea is that the older family member can nominate someone to make decisions for them if needs be. This can kick in if they suffer from dementia, or if any accident or illness leaves them with reduced mental capacity. There are two kinds of LPA. The property and financial affairs LPA allows the attorney to make financial decisions. This ranges from ensuring bills are paid to selling a property to pay for residential care.
The health and welfare LPA, meanwhile, means the attorney can make decisions about care. This could include medical treatment or care needs like washing and dressing. It also means the attorney can make choices about whether they need to move into a residential care home.
If they don’t have Lasting Power of Attorney, and they’ve already lost capacity, someone will have to be appointed as a deputy instead, which can take longer, cost more, offers more limited powers and requires ongoing costs and admin.
It’s also worth asking them to make it as easy as possible for someone else to manage their finances. As we go through life, we can accumulate loads of old savings accounts, ISAs, investments and pensions. For every different provider, that’s another organisation for the family to deal with. Consolidation reduces all this. There’s one proviso through: with pensions in particular, it’s vital to make sure you’re not paying huge charges or losing valuable benefits to bring things together in one place.
When the time comes for someone to step in, having things streamlined will make it much easier to see what assets they have, and whether they can get help from the government, or need to pay for their own care. It’s a good idea to prepare for this stage too, by getting your head around the rules that dictate how much support they can get from the government.
It’s not straightforward, because it will depend on the level of support they need, their income, and how much they have set aside in savings and investments. In some cases, it also includes the value of the family home. Very broadly, if they have assets of more than £23,250 and there aren’t specific people who need to live in their home, they’ll probably have to cover all the costs of care. If they have less than £23,250, they might get some help from the local council, but could end up having to pay some costs themselves. If they have very high levels of medical needs, they may get NHS care without charge, regardless of their assets – but the bar is set exceptionally high for this.
I know from my own experiences, and those of my friends and colleagues, that whatever preparations you make, providing care is enormously challenging for everyone involved. However, at least if you’ve had the conversations with your family, and put things in place, you have a better chance of being able to sort care that your loved one wants. If you can have these conversations nice and early, it won’t be a source of stress, making them worry even more about what lies ahead. Instead, it’s a chance for them to feel far more in control of what their future looks like.
Black Friday
It’s Black Friday next week, and already inboxes are filling with ‘unmissable’ deals. It’s no wonder it’s so easy to overspend. You can protect yourself though, by building a plan of action.
Make a list of everything you definitely need. If it’s a gadget or technology, make a note of the model you’re after or the features you want. Then shop around and work out what constitutes a good price for it. For Amazon, the camel camel camel website is your best option, while for other sites you can use PriceSpy. That way, when the day comes, you’re in a better position to assess whether something is a good deal or not.
Of course, if you can’t get a deal on the things you need, the real challenge is to resist the temptation to run off and buy something else instead. I’d like to pretend that simply knowing this is a risk is going to protect you. But then I’m someone who owns a blender and an electric toothbrush when what I really needed was a laptop, so sometimes knowing the right thing to do and actually doing it are two very different things.