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Wealth, Ill Health, and the Over 50’s

by | Mar 6, 2023 | Retirement Guides

Equity Release in Wakefield

A recent article titled “Ill-health hitting wealth of over-50s” discusses the impact of ill-health on the financial wellbeing of individuals aged 50 and over in the UK. In summary, the article highlights the following key points:

  • A survey conducted by the Equity Release Council reveals that ill-health has become the leading cause of financial difficulty for those aged 50 and over, surpassing unemployment and divorce.
  • The survey found that 31% of over-50s who experience ill-health reported that it has had a negative impact on their financial situation, compared to 22% who cited unemployment and 14% who cited divorce.
  • The negative impact of ill-health on finances is attributed to a variety of factors, including reduced income, increased expenses, and reduced ability to work.
  • The survey also found that only 39% of those surveyed had made financial plans to account for potential ill-health, indicating a need for greater awareness and preparedness.

In our dealings with clients, we have noted that health issues among people above the age of 50 are impacting their finances and endorse the fact that it is essential to be financially prepared for any unforeseen medical emergencies. In this post, we will discuss how to manage finances during illness, and how to prepare for medical emergencies.

Build an Emergency Fund:

It is essential to have an emergency fund that can cover at least six months of expenses. This fund should be easily accessible and not invested in risky assets. In case of illness, this fund can help you cover medical bills and other expenses without disturbing your long-term investments.

Consider Health Insurance:

Waiting times for healthcare have been rising steadily, and extended treatment timescales mean it can take you longer to get back to health and resume work.  Investing in a health insurance policy is something to consider but it is best done early, as usually you cannot get cover for existing conditions. It can also be beneficial to do it younger rather than later in life as it may be less expensive. 

Financial advisors can also guide you in understanding other types of health insurance that can provide you with an income to support you in difficult times. Employers may offer medical insurance which can subsidise the costs so if your employer offers this, it is worth considering. It is crucial to research and choose a health insurance policy that is suitable for your needs.

Plan for Long-term Care:

As people age, they may require long-term care, which can be expensive. It is essential to plan for long-term care and have funds set aside for it. One can consider long-term care insurance, which can cover the cost of nursing home care, home healthcare, and other related expenses.

Consider Life Insurance:

Life or Critical Illness insurance can be a vital tool in managing finances during an illness. It can help cover living expenses, pay off debts, and provide for your family in case of your untimely demise. It is essential to review your life insurance policy and ensure that it is sufficient to cover your needs.

Seek Professional Advice:

Managing finances during illness can be challenging, and seeking professional advice can be helpful. Financial advisors can guide you on how to manage your finances, choose the right insurance policies, and plan for retirement.

Equity release:

Overall, equity release can be a useful tool for retirees looking to access the value in their home, but it’s important to carefully consider all the factors before deciding. Seeking professional advice can help ensure that you make the best decision for your individual circumstances.

Conclusion:

Ill health can hit anyone at any time, so the best thing to do is to look after your health as much as you can to avoid ‘preventable illness’, however, I’m not a doctor and just like many of you, I need take better care of myself, so I won’t preach! 

Illness can have a significant impact on finances though, especially for people over the age of 50. Like all things in life, it is essential to plan and prepare as best you can, but with competing priorities, it is often difficult to decide on what to do first. The key to preparing protection for your financial situation is to start early and where possible seek professional financial advice. By considering these steps, you can reduce the burden on your finances to hopefully ensure a secure financial future.

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