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Later life planning

As you get older in retirement your needs may change. Thinking about your health and wellbeing, how you'll manage your money, where you might live and what you want to happen to your estate when you die in advance could help make sure that your later years are just as colourful as the decades that came before.

Groups of people on a street enjoying themselves

Later life living

Whether you want to stay living in your home, sell up and buy something with friends, or move into a new retirement village, it's worth thinking about the options you have on where to live and what support you might need like:

  • staying in your own home
  • staying in your own home with modifications or care support, regular visits or a live-in carer
  • moving closer to family or friends
  • moving in with family or friends
  • moving in to a retirement village or housing – with or without access to care support
  • moving in to full time residential care.

If you are thinking about modifications to your home, paying for care support or needing to move in to residential care we have information and support help.

At Legal & General we believe ageing is something to be celebrated and that entering this 'third stage of life' should be done so with excitement. Through our partners Inspired Villages and Guild Living, we are operating and developing vibrant communities in rural, suburban and city locations. We are giving older people a choice of lifestyles. Our later living communities offer residents, and the wider community, access to a host of facilities, including wellness spas and relaxation pools, restaurants, bars, cinemas and games rooms as well as medical care and support.


Lasting Power of Attorney

Thinking about the future, and the possibility that you might lose your mental capacity and be unable to understand and make your own decisions, can be difficult. But it’s important to think about who you’d like to help you if you couldn’t do it anymore in advance and talk this over with your family or friends. 

Setting up a power of attorney in advance of when you need it is something everybody should consider. The benefits are that it:

  • enables someone else to handle your affairs on your behalf
  • gives you the opportunity to discuss with your family your wishes for how you want financial and/or healthcare decisions to be made if anything were to happen to you
  • gives you peace of mind that someone you trust will be able to make decisions for you if it becomes necessary.

This is particularly important if you’ve been diagnosed with a condition affecting your mental capacity, but equally you might want to plan ahead just in case.

If you don’t have a power of attorney in place in advance it can be costly and complicated to enable someone to look after your affairs later. Don’t assume your spouse of civil partner will be able to automatically manage your money and make decisions about your healthcare – they won’t have the authority to do this if you lose your mental capacity without the right power of attorney in place.

You can only set up a power of attorney while you’re still able to make decisions.

When you register a power of attorney, it just sits there until you need to use it. In the meantime, you are still in charge of your affairs. There is a cost to register one and it must be registered with the relevant Government body.

There are different names for a power of attorney in the UK and different types, allowing your attorney to be able to manage all your financial affairs or your health and welfare:

Country

Financial affairs

Health and welfare

England

Property and financial affairs lasting power of attorney

Health and welfare lasting power of attorney

Northern Ireland

Enduring power of attorney for financial affairs

There is no power of attorney for health and welfare in Northern Ireland

Scotland

Continuing power of attorney for financial affairs

Welfare power of attorney

Wales

Property and financial affairs lasting power of attorney

Health and welfare lasting power of attorney

There is also an Ordinary power of attorney which covers decisions about your financial affairs and is valid while you still have mental capacity. This is useful to cover a temporary period for example a hospital stay or holiday, or if you're unable to get out or you want someone to act for you.


Writing a will

Over £8million in money and property went to the UK Government in 2019 because people didn’t leave a will. As of July 2020, there were over 8,000 unclaimed estates on the Government list.

Making a will is important as it tells everyone what should happen to your estate (money, possessions and property) after you die. If you don't have a will, the law will decide how this is passed on and in some cases it could end up going to the Government.

For example, a brother and sister are very close, but their mother passed away some time ago and they haven’t spoken to their father in decades. Neither has married or had children. If one of the siblings were to pass away without a will, called 'intestacy' or 'dying intestate', their estate would go to their father, leaving the other with nothing.

Having a will in place makes sure that your wishes are carried out and prevents unnecessary distress at what is already a difficult time for those left behind. You can also pass on your estate to friends or charities if that is what you want – it doesn't have to be your immediate family.

Your will can also be useful in making sure your estate is passed to friends and family in the most tax efficient way, reducing inheritance tax liabilities. 

Your will includes two important instructions:

• who will have your estate when you die and how to share this out

• who will be in charge of following these instructions and organising your estate. This person is called your executor and you can have more than one.

You can also include instructions for your burial or cremation.


Think about Inheritance Tax (IHT)

IHT is a tax on your estate after you have died. Your estate includes all your property, money and possessions.

There is normally no IHT to be paid if your estate is valued below the Nil Rate Band (NRB). This is currently £325,000 in the 2021/2022 tax year.

If your estate is valued over the NRB, the part of your estate over the threshold might be liable for tax at the rate of 40% unless you leave everything above the threshold to:

  • your spouse of civil partner, or
  • an exempt beneficiary for example a charity.

Both the IHT tax rate and NRB threshold are subject to change.

There are two other types of NRB.

The Transferable Nil Rate Band (TNRB) allows couples in a marriage or civil partnership can transfer any unused NRB from the first person to die to the surviving partner. This means that the surviving partner’s NRB threshold may be higher.

The Residence Nil Rate Band (RNRB) enables you to pass your home (or share of it) to your children or grandchildren. This includes step children, adopted and fostered children.

 

MoneyHelper is part of the Money and Pensions Service.

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