Concerned about dementia? Here’s how you could plan ahead

While retirement is the chance to spend your wealth and pursue your goals, it’s important to recognise that you’re also getting older – and with that means an increasing chance of poorer health.

In particular, dementia may be a source of worry. In fact, research by health insurance provider Vitality found that dementia is a major concern for UK adults. With estimates suggesting that one person in the UK develops dementia every three minutes, it’s somewhat understandable that 48% of people are worried about how the disease could affect their health, family, and finances.

Furthermore, as we live longer, the risk of developing the condition increases. NHS figures reveal that 1 in 11 people over 65 have the disease, and predict that more than 1 million people will be diagnosed by 2030. So, it may increasingly become a concern for you and your family as you get older.

While there may be lifestyle changes you can make to reduce your risk of cognitive decline, getting dementia may well be a genetic lottery. You might also be at greater risk if dementia runs in your family.

Yet, while you might not be able to prevent yourself from getting the disease, you could plan ahead and put measures in place that protect you, your family, and your finances should you ever be diagnosed.

Read on to discover a few practical steps you could take to do so.

Put a Lasting Power of Attorney in place

Dementia can be a worrying prospect because you may be concerned that losing your mental faculties could lead to decisions being made around you that you don’t necessarily support or agree with.

In this case, it can be incredibly powerful to put a Lasting Power of Attorney (LPA) in place. We have talked previously about how important it is to put an LPA in place as it can protect you and your loved ones should you ever lose mental capacity for any reason – including dementia.

When you set up an LPA, you appoint someone or multiple individuals – your “attorneys” – to make decisions and act on your behalf should you be unable to do so for yourself.

There are two kinds of LPA. The first is for your health and welfare, giving your attorneys the right to make decisions around your living conditions and basic daily routine.

It can be hugely reassuring to know that you’ll have someone looking out for your best interests if you ever require long-term care due to a condition such as dementia.

Meanwhile, it could also be useful to put a property and financial affairs LPA in place. This allows your chosen attorneys to make decisions about your wealth, including pensions, investments, and property. In doing so, you can ensure that someone you trust will make sensible financial decisions in line with your wishes.

Bear in mind that you can give your attorneys the power to start managing your financial affairs as soon as the LPA is in place, even if you haven’t yet lost capacity.

It’s important to put both types of LPA in place before you are diagnosed with dementia or lose capacity, as you must be deemed of sound mind to do so. Otherwise, it could be far more difficult for your loved ones to make these decisions surrounding your wellbeing and wealth.

Understand the financial help available for those with dementia

According to the Alzheimer’s Society, someone diagnosed with the condition spends around £100,000 on their care.

So, another sensible way to prepare is to understand the financial help that’s available for those with dementia. That way, you can claim valuable income that could support you in managing a diagnosis and covering these high costs.

For example, those over the State Pension Age who need help at home can claim the Attendance Allowance. In 2024/25, you can get either £72.65 or £108.55 a week depending on what kind of help you require.

Meanwhile, those needing help at home who are under the State Pension Age could claim the Personal Independence Payment. This payment depends on whether you need help with everyday tasks, getting around, or both, and you can receive both parts of the payment if you’re eligible.

Similarly, if a loved one provides regular care for you, they may be entitled to the Carer’s Allowance or Carer’s Credit depending on the circumstances of the care you receive.

Taking the time to understand how these rules work can give you reassurance that you’ll be financially stable, even if you are diagnosed. It can be useful to do so alongside someone who will be able to help you if you ever lose capacity, ensuring you’ll have assistance to complete a claim if you’re unable to do so by yourself.

Earmark specific funds to pay for your care if you ever need it

You could also set aside specific funds to use for the costs of dementia. You could earmark a part of your pension that you don’t spend throughout retirement. Or, you could deliberately save or invest into an entirely separate account that you retain for this purpose.

The knowledge that these funds are available if you need them can help soften the sting of the worries you might have about being diagnosed with dementia.

If you do decide to go down this route, it’s worth speaking with a financial planner. We could help you calculate how much you need to achieve your desired lifestyle in retirement, and then assist you in building up surplus funds that could be used for dementia care in a way that doesn’t inhibit your ability to reach your goals.

Of course, as there are so many variables, it would be difficult to calculate an exact amount you’d need for care. Even so, knowing that you have funds available could offer you much-needed peace of mind.

Get in touch

Whether you’re concerned about dementia or any other aspect of your financial planning, we can help at Britannic Place.

Email or call 01905 419890 to speak to a member of our team today.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

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

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