Investment

[Highway Man]

There's a youtuber who does good explanations on pensions, called James Shack, as here :

It's all a bit more complex than a flat rate of draw-off. You'll likely need less when you're older, but how would you pay for a care home? A lot of people assume they can sell their house to pay for it. But if you're unlucky enough to be around for a long time, you might find it's not enough. You may need to provide for TWO people of course and it depends where you live etc.

If you have an income of 40k, it would be tight to find a place which would be cheap enough. Their price increases always seem to go faster than inflation too.
You can chuck all the numbers at an AI LLM, they don't get frustrated.
Scenario: - Care home costing £1500/week
__Inflation running at 4%, but the care home increase is 8% a year. My mother's was.
__Your Pot returns you 4% ABOVE inflation, ie 8%. That's not necessarily easy.

500k would last 6.9 years, until the capital is gone,
£1m would last 13.7 years.
The mean duration in a Home is I think 4 years, but my mother hung on a lot longer.
They're keeping people alive way past their sell by date.

Adding the state pension, index linked, makes the £1m last 15 years
and for the 500k, it's 8.1 years. This all ignores TAX.

Pretty sobering figures there, I couldn't afford to last a few years in care. They would have to house me in the car park or kill me.

 

[motorbiking]

I believe the average stay in a care home is 18 months. If the government made private care tax deductible it would be a start.

 

[Mottie]

I believe the average stay in a care home is 18 months. If the government made private care tax deductible it would be a start.

Mrs Motties mum must be on borrowed time then - 3 years plus at the moment. Must have spent around the £200k mark so far and has been paying tax all the time she has been there.

Most people in her care home with dementia are long term residents. On average, 8-10 years or more.

 

[Highway Man]

Mrs Motties mum must be on borrowed time then - 3 years plus at the moment. Must have spent around the £200k mark so far and has been paying tax all the time she has been there.

Most people in her care home with dementia are long term residents. On average, 8-10 years or more.

Lena deals with this on a daily in her business, it is staggering the amount of money that some pay for the very same care as some receive for free. A lot of people move money around from their bank acounts through family members in order to avoid paying. It isn't a fair system.

 

[motorbiking]

My mum is similar hers is around £90-95k currently with all the "extras".

 

[motorbiking]

Lena deals with this on a daily in her business, it is staggering the amount of money that some pay for the very same care as some receive for free. A lot of people move money around from their bank acounts through family members in order to avoid paying. It isn't a fair system.

Burnham's National care system would be well on its way if he considered creating a few state care homes and allowing care costs to be tax deductible. The State created care homes would create competition and the tax treatment would allow those who have saved to fund their care better. Margin's in this business are around 35%, which is quite high. Many professional services firms make 20-25% margin. Knocking that down 10-15 points would make a difference. Pulling state care out of the private system would lower costs for all and make it much fairer.

 

[Highway Man]

Burnham's National care system would be well on its way if he considered creating a few state care homes and allowing care costs to be tax deductible. The State created care homes would create competition and the tax treatment would allow those who have saved to fund their care better. Margin's in this business are around 35%, which is quite high. Many professional services firms make 20-25% margin. Knocking that down 10-15 points would make a difference. Pulling state care out of the private system would lower costs for all and make it much fairer.

100% it would reduce costs, only issue with that is then the quality of the care. A lot of state run care homes are under funded and have quite low standards. Not all but certainly more than the private care homes.