Essential guide to financial planning for older people

People are living longer, but unfortunately, many live for longer in ill-health as well. Whether you are lucky enough to live a long, healthy life, or if you need care as you age it all costs money. It’s essential to encourage your older relative to think about finances as early as you can to ensure they have everything they need to live a comfortable life. A recent report[1]  shockingly revealed that 85 per cent of adults aged between 51 and 75 done no financial planning for care in their old age.

Go through a financial checklist

It is worth sitting down with your older friend or relative and running through a financial checklist to see how healthy their finances are looking. After all, they might have to rely on them post retirement for thirty years or even longer.

The government’s most recent proposal on the future of funding care stated that care costs will be capped at £75,000 (excluding accommodation and food) from 2020, along with the introduction of a higher means test of £123,000.Such proposals will help to avoid the catastrophic costs suffered by a minority of care residents

Everyone’s circumstances are different, both financially and in terms of health and well-being, so it’s very important to work with your older relative to put together a realistic financial plan, which sets out their income and their outgoings, not just now, but over the next few years, so they can work out what they have to live on and what they can save for future care.

Here is a checklist to work through with your older relative, ideally before their retirement

  1. Work out their current monthly expenditure from bank statements and credit card statements and think about how this might change when you are not working e.g. will your relative travel more?
  2. Work out their monthly income sources from pensions, bank interest, savings etc.
  3. Check what benefits they are entitled to, such as free bus travel and subsidised rail fares. They might be eligible for pension credits, which can top up your basic state pension and they might also be eligible for other benefits, such a Winter Fuel Allowance.

 You can read more about what benefits you might be entitled to HERE 

  1. Decide when they want to retire: These days, you can plan when you want to retire. State pension is not available until your reach the set pension age, which is between 61 and 68, depending when you were born and if they’re male or female. Anyone can carry on working past State Pension age. You can calculate your relative’s State Pension age here
  2. Tell HMRC that they are retiring and give them some notice, ideally a few months before, of when your relative intends to retire.
  3. Do they want to delay drawing your state pension, so you will get more when you do retire?
  4. Calculate their final pension. Six months to a year before you intend to retire, contact your current and past pension providers and find out what pension is owed to you and how it will be paid. At work, you can contact the company’s pension trustee to get this information. Regarding your State Pension, the Pension Service should contact you four months before you retire, but you can call them on 0808 100 2658.

DOs and DON’Ts of financial planning for older people


  • DO plan ahead
  • DO work through the finances for the years without earnings
  • DO think about how your older relative will fill their time


  • DON’T allow your loved one to fret about money. Careful planning will be an enormous help. If in doubt, ask for help from a financial planning expert

Financial care planning

As your relative ages, you would be sensible to think about looking at their finances with them or encouraging them to do it themselves if they prefer, to ensure they can manage any future care issues and continue to live as comfortably as they can.

 Checklist of financial considerations for care

  1. Gather all financial information together. This could include bank statements, savings and investment statements, details of State Pension and any benefits such as Attendance Allowance.
  2. Check that all benefits are being claimed. Help with this can be found at Citizens Advice or on the government’s website HERE
  3. Add up all the income and consider any expenses that will continue to be. This should include all household and personal expenses
  4. Look at the difference between income and expenditure and think about how this will change as your older parent ages. What would happen if care costs either at home or in a care home had to be paid for?
  5. Think about housing. Is it time to downsize to a smaller property and invest the excess in savings or care plans for the future? Does your parent want to consider moving to a property in a retirement community, which can meet their changing needs as they age?
  6. Consider the pros and cons of various types of saving for care, from deposit accounts to care fees annuities. See Chapter 5 for a full overview.


  • DO encourage your relative to plan
  • DO offer help and support
  • DO take expert advice if needed


  • DON’T worry about raising the issue of money management. It’s important
  • DON’T worry if your relative is reluctant to discuss it initially. Keep returning to the subject over time

[1] Consultus Care, 2015

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