Retirees in ten years time are going to be forced to chose more mundane options compared to their parents when it comes to what they spend their savings on according to a report.
The report titled “Citizen 2025” by Barcan & Kirby says that whilst current retirees are managing to save a “somewhat dumbfounding” £49 billion a year, current and future retirees will soon be choosing the less exciting option when it comes to what to do with it.
The report states people more often than not underestimate their life expectancy, and care home costs could well reach £70,000 a year by 2035 presenting a huge problem for those currently in their 40s.
Saga’s Paul Green said: “When the Beatles first sang ‘When I’m 64’, retirement for most people was short-lived or not reached at all. In years to come, the principal financial challenge will be funding a work/life balance and then funding proper care.”
40% of elderly people are also predicted to have some sort of mental capacity issue by 2025.
Angela Thomas, Partner in Barcan & Kirby’s Wills, Trusts + Probate department, said: “Over the coming 10 years we can expect more retirees to start SKIing (Spending the Kids’ inheritance). Not on round-the-world cruises, dream cars or speedboats, but on more mundane matters as they come to realise that they need to significantly increase the amount they have saved to fund retirement living and possibly the cost of later life care.
“We’re beginning to see what we might call a ‘middle-class care gap’, whereby people who would otherwise consider themselves fairly affluent find themselves thrust into public sector care homes as they have failed to plan adequately for the cost and length of later life. With this we can expect further increases in multi-generational living, as housing shortages, the rising cost of childcare and an ageing population squeeze the traditional family unit at both ends. We should also consider care for the carers, as the age of carers themselves edges ever upwards – those in their 70s caring for parents in their 90s, for example.
“With one million of the population likely to be suffering with dementia in 2025, we should expect a significant rise in the number of people putting in place lasting Powers of Attorney for both finances and health and welfare decisions. Indeed, we’ve noticed an increasing number of people coming to us before dementia is even a near-term prospect for them.
“For those without Powers of Attorney in place, going through the Court of Protection can be a lengthy, costly and time-consuming experience. People need to be made aware of the importance of writing a Will and – as they live longer – the need to update it. Simply writing a Will is not enough and we’re increasingly seeing Wills being challenged on incapacity grounds.
“More than ever people will be in need of good legal advice, and this will need to be presented in as accessible formats as possible, adaptable, with simple language and easy to read. The need for face-to-face advice will continue, especially for vulnerable clients to ensure that their needs are met and they’re aware of the consequences of the documents they’re signing.”
