Care doesn’t always come in the form of a healthcare professional or a clinical setting. Often, it’s offered by someone close to the person being cared for, perhaps a spouse, a child, or a friend.
Indeed, according to the Office for National Statistics (ONS), the latest census revealed there are around 5 million unpaid carers in the UK.
While the emotional side of caring can be profound, challenging, and rewarding, the financial impact can also be significant and is important not to overlook.
So, if you or someone you know is in a caregiving role, read on to discover four reasons you may need to revisit your financial plan.
1. Your budget may change
When you take on caring responsibilities, your financial situation can change fairly rapidly. Whether stepping back from work, losing a second household income, or taking on new outgoings like medical supplies or home adaptations, your budget may be considerably different.
Even if you continue working, you might find yourself juggling costs you hadn’t anticipated. The balance between caring and managing household finances can be tough, particularly when it involves unpredictable expenses.
A financial planner can help you restructure your finances to fit your new circumstances. This might include creating a new monthly budget, making sure you’re using available benefits or allowances, or finding new income streams to help keep your long-term goals on track.
2. You may need to rethink your long-term goals, such as retirement
If caring means you have to reduce your work hours or leave the workforce entirely, your pension contributions might stall, which could have a considerable effect on your long-term plans.
You might not build up enough National Insurance (NI) credits to receive the full State Pension, or you might face a future shortfall in your retirement fund.
A financial planner can help you assess the potential effects of missing pension contributions and can explore strategies to help protect your future.
This might include part-time or flexible work, catching up on pension contributions later, or using other assets, such as property, to generate income.
You may also want to rethink what retirement looks like now that caring has become a part of your life. For instance, you may be caring for a partner with whom you made your retirement plans, and now you are dedicated to looking after them, your goals might have shifted entirely.
3. Your estate plan might need updating
Caring responsibilities can influence not just your day-to-day finances but also your legacy plans. As such, you may need to review your estate plan to reflect your current situation.
This could mean updating your will, ensuring you have a Lasting Power of Attorney (LPA) in place, or revisiting decisions around trusts, gifting, or inheritance. If you’re helping to manage someone else’s plan as well as yours, there may be further complexity as to how to best structure your collective estate.
A financial planner can help ensure both your estate and the estate of the person you’re caring for are protected. They can support you in managing future care costs without compromising your long-term goals, reduce potential tax liabilities, and make sure your wishes are clearly recorded.
4. Having a plan can help ease your load
Caring can be emotionally and physically draining. A clear financial plan won’t take the weight of caring off your shoulders, but it can ease some of the pressure by offering stability and reassurance.
When you know your finances are under control and that you’ve planned for what’s ahead, it gives you the space to focus on the wellbeing of the person you’re caring for and your own peace of mind.
A financial planner can help you make that happen. From creating a budget to adapting your estate plan, they’ll work with you to build a plan that supports both your role as a carer and your future as an individual.
Get in touch
Caregiving can be challenging, and making sure you’re emotionally, practically, and financially prepared can make a considerable difference.
So, if you’re in a caring role, it’s a good idea to speak to a financial planner. They can help you create a strategy that protects both you and the person you’re looking after.
To speak to a financial planner, get in touch.
Email hello@solusfinancial.co.uk or call us on 01245 984546.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients 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, tax planning, trusts, Lasting Powers of Attorney, or will writing.
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.