Nearly one in three of us have no idea know how we will finance our old age.
NS&I's latest Quarterly Savings Survey has revealed that just under a third of Britain's adults (31%) do not know how they will finance their needs in later life. This includes long-term illness, nursing home or care fees or looking after partners, parents and siblings.
Thinking about the futureThe survey estimated that 26.7 million adults in Britain (54%) have started thinking about their financial needs and just over a quarter (27%) of these have actually started to put financial plans into practice.
The more than a quarter of Britons (27%) who have yet to consider financial planning in later life admit they do not want to think about such events. Some 23% say they simply have not had time to think about their later life financial needs, and just under a fifth (19%) prefer to take a short-term view of their finances and use the money they have for the present.
A further 12% don't consider that this situation will affect them in the near future and believe they will have plenty of time to consider such planning going forward, while 7% of Britons do not consider later life financial planning as important.
Planning is everythingJohn Prout, NS&I retail customer director, said: "Planning financial needs for later life requires careful consideration in plenty of time. Understandably many people don't like to think about growing older and the possibility of needing long-term care one day. It can be a distressing and emotive issue to talk about.
"But with people living well into their eighties, many more of us are likely to need care in the future, and are likely to need to care for others also. Getting the right information as early as possible is to vital to making sure you get the best possible care you can in later life."
Tish Hanifan, chairman of the Society of Later Life Advisers (SOLLA), said: "This research reflects the experience of many specialist later life advisers whose clients are primarily concerned with being able to both enjoy their retirement and continue to be able to make choices around their care needs.
"Undoubtedly the way to achieve this is to begin to factor the costs of having the kind of retirement you want into your financial planning as early as possible. An important starting point is for the consumer to have access to as much information as possible. Informed consumers are best able to make the right choices."
Why do you think it's important to consider financial needs in later life?
- I want to be happy in my later life and not have decisions taken out of my hands 48%
- I want to plan my financial matters in a calm manner so that rushed decisions aren't made at a stressful time 39%
- I want to make my children aware of such matters 23%
- I want to help my family's financial planning going forward 21%
Planning financial needs for later life requires detailed and careful consideration, allowing plenty of time, as the options available and the cost of care increases. The average age that Britons believe they should consider later life financial matters is 37.
Although just 27% Britons are preparing for later life needs, almost half (48%) believe that it is important to plan for such necessities so that their later life is enjoyable and they have control of important decisions.
A third (33%) of Britons endeavour to make plans early just in case things unexpectedly take a turn for the worse, (23%) want to make their children aware and educate them of planning such events, while just over a fifth (21%) want to help their family's financial planning going forward.
Caring for othersWhile planning for your own care is important, an increasing number of Britons are finding that it is not just themselves that they will have to look after in the long-term.
A fifth (20%) of British adults say they either already care for, or expect they will need to care for parents in the future, 12% care or expect to care for their child/children, and 11% say that in their retirement they will need care for another family member.
As many as 44% of Britons feel prepared for this added responsibility, and either are or will be able to finance this care alongside their own living costs, with men (47%) increasingly more confident than women (40%).
More than a third (35%) felt comfortable that they will budget accordingly, and 18% either are or will save on a monthly basis to provide for these needs.
How do you/will you finance the care you will provide alongside your living costs?
- I budget/will budget accordingly 35%
- I rely/will rely on the persons concerned pensions and benefits 25%
- I have had/will have to make financial sacrifices of my own in order to fund care for others 23%
- I put/will put aside a set amount each month in a savings account 18%
- I rely/will rely on the persons concerned savings 18%
- I rely/will rely on a carers allowance 18%
A quarter (25%) of Britons who care for or need to care for others will rely on the persons concerned pensions and benefits while (23%) said that they would need to make financial sacrifices of their own in order to fund care for others.
Financial planningNS&I's research has also revealed that almost half of Britons (48%) have not or do not intend to seek advice regarding their later life financial planning.
Just over a fifth of Britons (21%) have approached or would approach a financial adviser in their method to planning their later life needs, while 13% would approach friends/relatives for advice. In addition 9% would consult their parents for advice and 9% would consult the Citizens Advice Service.