8–14 June is Carers Week, which is dedicated to recognising the work of unpaid carers and raising awareness about the challenges they face.
A carer is anyone who provides support to someone unable to cope independently. Their work is essential, yet is often unpaid.
Indeed, according to Carers UK, there are around 5.8 million unpaid carers in the UK, with women making up around 60% of that number.
Taking on a caring role can significantly impact your finances. It may reduce your household income or increase your expenses, and it may also mean you need to review key elements of your financial plan, such as your estate planning, to reflect your circumstances and responsibilities.
Read on to discover four ways financial planners can help caregivers.
1. Designing a tailored budget
Caring often brings significant changes to your household finances, and it’s important to review your budget to ensure it reflects your circumstances.
For instance, you may have reduced income if you leave your job, if you cut back your working hours, or if the person receiving care is no longer able to work.
There may also be additional costs that come with the care needed, such as home adaptations or specialist transport costs, which can push your expenses up.
A financial planner can help you design a new budget based on your situation and needs. In addition to assessing your income and expenses, this might include:
- Ensuring you receive all the government support you are eligible for
- Exploring protection options
- Reviewing your existing savings
- Identifying alternative income sources.
By doing this, a financial planner can ensure you have all the financial support available to you and work out what budgeting adjustments you may need to make from there.
2. Adapting your retirement plan
Becoming a carer can often mean your own retirement plans fall by the wayside.
This may be because of changes in your financial circumstances. For instance, you may make fewer workplace pension contributions if you reduce your working hours, or you may no longer qualify for the full State Pension if you don’t make 35 full qualifying years of National Insurance contributions. This is in addition to the budgeting changes you read about above.
Furthermore, your immediate priorities and long-term goals may also change. Caring for a loved one can change your vision for retirement, as you might shift from focusing on travel to ensuring you remain financially secure while receiving the necessary healthcare and support.
A financial planner can help you review your retirement goals and create a new plan that reflects your circumstances. They can model different scenarios based on your current standing and future needs and then build a plan that supports both your future and your caring responsibilities.
3. Updating your estate plan
As you’ve seen, caring often impacts your finances in multiple ways, which can have a ripple effect on many elements of your financial plan, and estate planning is not immune either.
Providing long-term care can sometimes require drawing on savings, selling assets, or changing income, all of which can gradually reduce the value of your estate over time.
To help protect your estate and that of the person you’re caring for, it is important to review and update estate plans regularly.
This might include:
- Ensuring your wills reflect your current wishes and circumstances
- Putting Lasting Powers of Attorney (LPAs) in place for both financial and health-related decisions
- Exploring estate planning strategies, such as gifting or using trusts to help preserve more of your legacy.
A financial planner can help you ensure your estate plan continues to align with your circumstances and wishes and that more of your wealth is preserved for your future beneficiaries.
4. Giving you greater peace of mind
Caring can entail significant emotional and financial pressure, which can lead to stress and uncertainty over time.
Having a clear financial plan in place tailored to your needs and situation can help bring about greater peace of mind. It can help reduce uncertainty about your future security and stability, giving you one less thing to worry about during an already demanding time.
By building a plan that accounts for both your immediate needs and longer-term goals, you can feel more in control of your financial situation and confident that you have the necessary means to help you through the challenges of being a carer.
Ultimately, a financial plan can help you focus on supporting the person you care for, while still protecting your own wellbeing.
Get in touch
To find out more about how financial planning can help carers, get in touch.
Email us at hello@vwmwealth.com or call us on 0141 229 4004.
Please note
This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
The Financial Conduct Authority does not regulate estate planning, cashflow planning, trusts, or Lasting Powers of Attorney.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
