Dementia is a growing challenge. As we live for longer, it has become one of the most important health and care issues facing the UK and the wider world. In England, the NHS estimate that around 676,000 people have dementia. In the whole of the UK, the number of people with dementia is estimated at 850,000.
Dementia mainly affects older people and, after the age of 65, the likelihood of developing dementia roughly doubles every five years. However, dementia can sometimes develop earlier, presenting various issues for the person affected, their carer and their family.
People living with dementia may have always managed their own or their family’s finances but now need someone to help them. They may also need care when it comes to health or daily activities.
And, of course, dementia can affect an individual at any time. While there’s currently no cure, there are steps you can take to ensure there is support in place if a loved one needs it.
Some simple steps you can take
If you’re caring for a loved one and you’re worried about their ability to manage their money, there are some simple steps you can take.
- Set up standing orders or direct debits for regular bills and subscriptions so they’re paid on time
- Make sure all the individual’s income, including pension and benefits, is paid directly into their bank or building society account
- Set up online or telephone banking so they don’t have to visit a branch
- Ask for support from the bank – for example, they can supply a chip and signature card for customers who are unable to memorise a PIN.
Put a Lasting Power of Attorney in place
Many people, including those with dementia, will reach a point where they can no longer make decisions about their finances or their care. This loss of ‘mental capacity’ comes when someone is unable to weigh up information, make a decision, and communicate this to others.
A Lasting Power of Attorney (LPA) is a legal document which appoints one (or more) trusted people to make decisions on an individual’s behalf.
There are two types of LPA, and it is possible to draw up one, or both. The same attorney(s) can be appointed for both or someone different can be appointed for each.
- Health and welfare – the attorney makes decisions regarding medical care, issues such as moving into a care home, and life-sustaining treatment. This can only be used when the individual has lost mental capacity
- Property and financial affairs – the attorneys make decisions regarding managing bank and building society accounts, paying bills, collecting benefits or a pension, or buying and selling a house. A person does not have to lose mental capacity for this type of LPA to take effect
What’s important to note here is that a person can only put an LPA in place if they have mental capacity. If they are diagnosed with dementia, or otherwise unable to make this decision for themselves, it will not be possible. So, it’s vital that you have this conversation with loved ones while you can.
Help with planning for care fees
If an individual owns more than £23,250 of assets (in England and Northern Ireland, £28,000 in Scotland, £24,000 if you receive care in your own home or £50,000 if you receive care in a care home in Wales) – your local authority will not offer financial support, and you must fund your own care home fees.
If you aren’t eligible for NHS or local authority care home funding, you will need to pay the fees for yourself. The average care home fees for self-funders currently stands at around £1,000 per week, but this doesn’t take into account the additional specialist care that those with dementia may need.
Anyone with significant assets will need to consider how they will fund later-life care, particularly if they are diagnosed with dementia.
Could caring for someone with dementia alter your own financial plans?
The NHS say that there are around 540,000 carers of people with dementia in England and estimates suggest one in three people will care for a person with dementia in their lifetime.
Half of these people are employed, and it’s thought that some 66,000 people have already cut their working hours to care for a family member. A further 50,000 people have left work altogether.
If you find yourself in a position where you need to care for someone with dementia, it could affect your own financial plans. You may have to reduce your hours, find additional money to pay for care and support, or even give up work.
Working with a financial planner
As the number of people with dementia in the UK climbs towards one million, it’s important to put plans in place to deal with this eventuality – either for yourself or for older relatives.
Working with a financial planner can give you the peace of mind that you’re well prepared. From putting the right Lasting Power of Attorney in place to making sure you have the capital to fund care costs we can work with you – and your loved ones – to ensure you’re ready for any eventuality.
Contact us by email at email@example.com or call us on 01189 876655.