If you know a loved one who has been diagnosed with Alzheimer’s disease, the leading cause of dementia in the UK, you’ll know just how much harm it can do. 

Dementia comes in many forms, but usually affects memory, speech, and a person’s ability to take care of themselves.

And the number of people living with it is increasing.
 
The NHS reports that 1 in 11 over-65s has dementia. By 2030, it expects more than 1 million people to be affected. [1]
 
Meanwhile, the Alzheimer’s Society estimates that dementia is one of the most expensive diseases to provide care for. 63% of the costs are shouldered by those with dementia and their families. [2]
 
Here are three financial steps you could take to help you and your family plan ahead.

1. Register both types of Lasting Power of Attorney

A Lasting Power of Attorney (LPA) allows you to designate a nominated person or people to make decisions on your behalf.

There are two types of LPA:

• Health and welfare LPA – Gives your attorney the power to make decisions for your health, including starting or stopping a specific treatment, managing your daily routine, or moving you into a care home.
• Property and financial affairs LPA – Gives your attorney the power to manage your finances, including accessing your bank and savings accounts, making insurance claims, paying your bills, collecting your pension and/or benefits, and selling your home.

If you have both LPAs in place and are diagnosed with dementia, someone you trust will be able to act in your best interests.

Crucially, you can’t register either type of LPA once you have already lost mental capacity. So, it’s a task to tackle sooner rather than later.

2. Set aside some of your savings for later-life care

Dementia care can be expensive, especially in the late stages of the disease. While you may qualify for continuing healthcare (CHC) under the NHS, it’s difficult to secure and you may need to pay for your own care.
 
Even if you don’t develop dementia, increasing life expectancy means there’s a greater chance that you’ll need some form of care as you age. 

3 tips for setting money aside

• Use cashflow modelling software to model how much you can afford to put aside.
• Ensure you’re saving or investing the money efficiently, giving it the greatest chance of growing in line with rising care costs.
• Talk to your family about where the money is (for example, if some of your wealth is tied up in your home, it may need to be sold to pay for care). 

Planning early could help you afford the care you need more easily. 

3. Ensure you put appropriate protection in place
If you were diagnosed with dementia while you’re still earning, it could seriously impact your day-to-day finances. Similarly, needing care in retirement could deplete your savings and investments faster than you’d anticipated.

Appropriate protection could help to lessen the financial blow.

• Critical illness protection offers a one-off lump sum for those diagnosed with an eligible illness, or who become critically injured. Having this in place could reduce your family’s stress if you were diagnosed with dementia.
• Income protection insurance offers ongoing payments up to 60% of your usual income. You could use these payments to help cover household essentials without using your savings or investments.
• Life insurance. If you are terminally ill, some forms of life cover may offer an early, tax-free payout to help your family cover immediate costs.

Regardless of what may happen in the future, arranging cover while you’re healthy could reduce the monthly cost and provide peace of mind.

Get in touch

If you’re supporting someone with dementia or planning ahead for your own future, we’re here to help you prepare. 
Email [email protected] or call us on 0800 048 0150.

Please note

The information contained in this article is based on the opinion of Titan Wealth Planning and does not constitute financial advice or a recommendation for any investment or retirement strategy.

All information is correct at the time of writing and is subject to change in the future.

Note that life insurance and financial protection plans typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.

Cover is subject to terms and conditions and may have exclusions. Definitions of illnesses vary from product provider and will be explained within the policy documentation.

The Financial Conduct Authority does not regulate cashflow planning or Lasting Powers of Attorney.