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Financial planning points for different types of carers

10/06/2019

June 10th marks the start of Carer’s Week an annual campaign to raise awareness of caring, highlight the challenges unpaid carers face and recognise the contribution they make to families and communities throughout the UK. Taking care of another’s finances as well as your own can be daunting and vary substantially depending on your relation to the person your caring for.

Rachael GriffinThe NHS provide four broad categories and below are financial tips for each from Quilter tax and financial planning expert, Rachael Griffin.  

Parent

33% of carers are looking after a parent. These people might want to consider the following financial planning points:

  • Power of Attorney

It is imperative that a parent sets up their PoA as early as possibly to give them control over who becomes their main carer in the event they can no longer look after themselves. Failing to set up a PoA can add an extra layer of difficulty to the caring process as if you don’t the Court of Protection will have to appoint a deputy on the person’s behalf who may not necessarily have been their first choice when they had the capacity to make the decision. While a deputy and PoA essentially have the same job with same duties, crucially a deputy will be heavily scrutinised and supervised by the Office of the Public Guardian (OPG) for the duration they care for someone.

  • Wills

It’s important to ensure that a will is in place for a parent before their health starts to deteriorate so it is less likely to be challenged in court and cause delays at an already difficult time for a family. Similarly, just the process of writing a will can be a useful process for analysing a person’s estate and working out whether there are any inheritance tax mitigating steps that could be taking to reduce someone’s liabilities. They are also important for providing clarity over which family members get heirlooms and personal possessions. You may also find that there is some extra funds available which might be able be used to pay for any extra care costs.

Spouse

26% are looking after a spouse. These people might want to consider the following financial planning points:

  • Protection

Typically a carer will seem like the protective force in this kind of relationship; however it is important that they themselves also take out a protection policy. This is particularly important for full-time carers who might have left the workplace to take on caring duties but in doing so also left behind any employee benefits, such as protection. If someone is caring for their husband or wife and then falls ill it can leave the pair in a very difficult position having to not only cope with the lack of earnings but also the need to pay for additional care.

  •  Wills

If you are looking after a spouse who might be suffering from declining mental or physical health it is sensible to make sure that you have a will in place, which makes sure that they are left the right level of funds that they might need for additional care if possible. Wills are also important documents for providing guidance on who someone would like to take on caring responsibilities for dependent children. If a couple has young children but one half of the couple is too unwell to care for the children, it is worth spelling out in a will who would be best placed to take on the child care.

  • Retirement planning

While carers may often put the person they are caring for first, it is crucial not to forget that at some point you are going to need some retirement provision. Importantly, full-time carers who have left work to take on caring duties should if possible continue to regularly contribute to a pension or make sure they have some provision for retirement.

Child

13% are caring for a child that requires special care. These people might want to consider the following financial planning points:

  • Trusts

If you are caring for a child that will never be able to look after themselves it is a good idea to think about setting a up a trust for them. Depending on the type of trust you choose to us, this type of financial tool can enable you to decide how assets within the trust are distributed and to whom even after you die.

  • Lifetime gifting

Depending on circumstance it may also be useful to think about whether it is a good idea to start gifting through a child’s lifetime so that they have the maximum funds available for their caring needs later in life when you may not be around to give it to them.  

Friend, neighbour or non-immediate relatives

9% are caring for a neighbour or non-immediate relative. These people might want to consider the following financial planning points:

  • Clarity on role

It is important to have a clear defined role when it comes to providing care to a friend or loved one. Often caring needs start to increase over time and people are quickly overwhelmed with needing to juggle their own commitments and helping those around them. If you are taking on the role of main carer for someone you need to be aware of the financial impact that might make and also be clear on whether you will get any support from other relatives or friends. Additionally, it is worth exploring whether it is worth you being named as their PoA to avoid any additional difficulties in you being able to provide care to them further down the line.

  • Avoiding scams

Often vulnerable people might need help sorting out aspects of their financial life. This could involve helping someone deal with online banking, making calls to providers or processing sensitive financial statements. Performing any one of these tasks could mean that personal data is disclosed to the carer, and if that then gets into the wrong hands it could be used to scam the  vulnerable person and leave the carer in a difficult legal position. It is therefore essential that if a carer is required to perform any task like this they seek PoA or a third party mandate from a provider, which enables them to help.

For more information contact

Alex Berry023 8072 626007741 151931alex.berry@quilter.com

Notes to editors:

About Quilter plc:

Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

Quilter plc oversees £114.9 billion in investments (as at 31 March 2019).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions; and discretionary fund management.

The business is comprised of two segments: Advice and Wealth Management and Wealth Platforms.

Advice and Wealth Management encompasses the financial planning network, Intrinsic; Quilter Private Client Advisers; the discretionary fund management business, Quilter Cheviot; and Quilter Investors, the Multi-asset investment solutions business.

Wealth Platforms includes the Old Mutual Wealth UK Platform; Old Mutual International, including AAM Advisory in Singapore; and the Old Mutual Wealth Heritage life assurance business.

The Quilter plc businesses are being re-branded to Quilter over a period of approximately two years:

  • The Multi-asset business is now Quilter Investors
  • Intrinsic to Quilter Financial Planning
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  • The UK Platform to Quilter Wealth Solutions
  • The International business to Quilter International
  • The Heritage life assurance business to Quilter Life Assurance
  • Quilter Cheviot will retain its name.

 

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