Paul Hammond writes:
The new Scottish Widows Retirement Report for 2024 has just been released. For 20 years this annual report has surveyed people to understand
“Their hopes and aspirations (for) retirement, to understand the plans that they have made, and to also understand their actual expectations.”
I've read every edition of this report with various hats on - from former financial advisor to retirement coach – and it's not particularly comfortable reading this year.
However, amid the stats on financial preparations for retirement relating to the the size of people's private pensions, there was one set of stats (on page 18) that leapt out at me here at Panthera Estate Planning.
Helping out children and grandchildren financially
The top priority for retirees when spending their retirement savings was "Helping children or grandchildren out in some financial way." Over one third of those surveyed (37%) put this above their own enjoyment of their savings for leisure activities, improving their home, holidays and even paying off debts.
The kicker statistic, however was this one:
“Over a fifth (23%) of people aged 65+ haven't or don't know whether they have any provisions in place to provide income to dependants if they passed away. … Specifically, of those who say they prioritise helping their children or grandchildren in some financial way, 17% haven't or don't know if they have made any provisions.”
Yikes! This suggests to me that those 23% have not considered let alone investigated methods to put those provisions in place. Like many people, I suspect, they may be mentally relying on a written Will to ensure their loved ones are taken care of. That is a mistake
Whilst only 122 probate contested cases made it to the Family Court in 2023, the number of cases settled out of court are likely to be much higher. According to The Guardian:
“As many as 10,000 people in England and Wales are disputing wills every year, according to estimates by specialist solicitors. In 2021-22, 195 disputes went in front of judges, up from 145 in 2017, but these are the tip of the iceberg, with most disputes settled out of court.”
For some, this process can be "ruinously expensive", even when defending the Will against someone else's claim.
Providing in your Will
At Panthera Estate Planning I can help you secure the inheritance and financial provisions for your family through a combination of:
- Writing a new, comprehensive Will written for your current circumstance (not what you wrote 20 years ago!)
- Advice on setting up Trusts that secure a portion of your estate against both the taxman and contentions.
- Registering two Legal Power of Attorneys, so if you become incapacitated, your estate can be managed by someone you trust.
- Scheduling regular reviews and updates to your Will to ensure it aligns with your personal circumstances, as and when they might change.
Looking after #1
Financially supporting your dependents after you die should not overshadow the importance of financially providing for yourself during your lifetime. There is no point in nailing down funds in a Trust that can't be touched whilst you are alive, only for you to subsequently run out of money and require your children to help you out financially, for example.
One of the announcements made by the government was that a key allowance for long-term care has been cut. According to The Independent:
“Rachel Reeves, the chancellor, scrapped the £86,000 limit on lifetime care costs due to take effect in England in October 2025 … The cap would have placed an upper limit on the amount individuals would be required to put towards their support at home or in care homes. Ditching the cap will save the Treasury around £1bn – but at the expense of ordinary people paying for their own social care bills, running into hundreds of thousands of pounds.”
Living longer
A relatively high life expectancy here in the UK suggests many retirees have an additional 25-30 years to enjoy after retirement. Those aged 65 now can expect to live a further 18 years for men and almost 21 years for women. Those aged 90 now can expect to live a further 3.8 years for men and 4.5 years for women.
However, it's important to remember that the latter stages of that retirement may be in declining or poor health. Hence, providing for long-term care is much more of a priority than for previous retired and retiring generations.
Make estate planning your no1 priority this summer
With announcements coming thick and fast from the new government, now is the perfect time to:
- Remove yourself from that cohort of people aged 65+ who have not put any provisions in place
- Review your existing provisions and update as required to reflect your personal and family circumstances
Contact me for your initial appointment, and let's sort out your estate planning this summer.