Savings

Only 2.5-3% of people over 65 live in care homes, and around 10% of over 85s. Most people manage at home, perhaps with carers coming in, or family, or they go straight into hospital and don't come home. As for saving, that entirely depends on personal circumstances - how much you have and how much you spend. If you invest an inheritance it should give you a return of greater than 10% per year, but what are you saving for? Do you have enough to live on currently? Do you have enough to see you through retirement? What are you saving for?

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How do you define a rainy day?

I would not define planning for future care costs as a rainy day but a major consideration for the last years of our lives that we all need to think about as we age.

A rainy day to me means a single event, an unanticipated emergency cost, for example, sudden but unavoidable household repairs, a leaking roof, walls or fences wrecked in a gale or a broken household appliance. Or maybe the car that you hoped would see you through to when you no longer wanted to drive can’t pass the MOT without major work that will cost more than the value of the car. You either pay for the repairs or buy a new used car.

£3,000 to £5,000 seems a reasonable sum to have set aside.

I agree with this and I do have some cash savings set aside for unexpected emergencies, but the rest of my capital is invested. We also have four children who seem to have more unexpected emergencies that we do, so keep more aside than you do so that we can lend them money to deal with their problems!

It's worth mentioning that you can save in a cash ISA and still have instant access, or in a stocks and share ISA with slightly slower access.

I think saving is very important especially thinking of long term care if needed. None of us knows what lies ahead and if illness strikes and we're unable to look after ourselves then we could end up spending several years in a care home which will be very expensive. Paying for help at home I guess would also be expensive.

I put an inheritance into an ISA bond and renewed it regularly, picking the best rate from the "safe" providers. In 13 years it has doubled in value, and it still sits there for care. Here, it is not far short of £70K mentioned, although DWP are expected to find c£40K of that at the moment. It pays for a new car, a plumbing emergency, and when/if DH goes before me, it will pay for a move, and if not, it will be a cushion for him (my biggest pension dies with me)
Another small pot of savings has been split between the children to help them onto the ladder, and we have given DGS a sum to help with furniture for his new home.

I have an acquaintance, who in her late 80s and childless was living a bit frugally - she applied for a couple of credit cards and ran them into many £££s and was gone before they caught up with her

I think the same about my little family. This year is not looking very nice for a lot of people. Hope I’m wrong.

M0nica

They say always have the euivalent of three months income in your bank or instant access ccount for emergencies and I reckon that having the euivalent of one years income, however much that might be, in long-term savings would be the ideal to aim at, anything else is just extra comfort.

Agreed.

I try to remember, before spending any excess that our daughters and theirs could always have an emergency need.

Too many variables. If you own your home you’re responsible for the cost of its upkeep and repairs, a tenant can ask the landlord. If you have any debt it usually makes sense to clear that before saving. If you have a sum that would incur substantial inheritance tax, you may want to mitigate it. Do you mean having easily accessible money to pay for an unexpected car repair or large appliance? Or are you thinking of paying for care in the future?

The answer to your question is, “It depends”!

I can see why working people would be wise to have 3 months' salary in accessible savings - in case they lose their job and have no income for 3 months - but someone on a pension is, presumably, covering their bills and can't have their income cut for three months.

If the roof falls off or the boiler breaks down it will cost the same to put it right whatever your usual income, so savings for those things should be more of a fixed sum than a multiple of your income. Same with the suggestion of saving a year's income to have in reserve - so much depends on what that is, and what people are saving for, as again, retirees are unlikely to need to fund themselves for a full year.

I don't think there can be a formula for this sort of thing. If we could see into the future and know how long we had left, and numerous other variables we could plan (but that would potentially be depressing). As it is, it's finding a balance between having what we feel is a good standard of living on a daily basis and having enough in the bank not to be worried in case things go wrong. Anything after that is a bonus.

I would say after tax income.

M0nica

They say always have the euivalent of three months income in your bank or instant access ccount for emergencies and I reckon that having the euivalent of one years income, however much that might be, in long-term savings would be the ideal to aim at, anything else is just extra comfort.

One years "normal level" income or one year of what income you actually got (ie significantly lower)??

If I was still working - the income I actually got was low - so I'm guessing it would be somewhere in the £22,000-£25,000 gross region. On the other hand I think a normal level income (which I never did get.....#sighs) would be around £35,000-£40,000 gross now?

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How do you define a rainy day?

I would not define planning for future care costs as a rainy day but a major consideration for the last years of our lives that we all need to think about as we age.

A rainy day to me means a single event, an unanticipated emergency cost, for example, sudden but unavoidable household repairs, a leaking roof, walls or fences wrecked in a gale or a broken household appliance. Or maybe the car that you hoped would see you through to when you no longer wanted to drive can’t pass the MOT without major work that will cost more than the value of the car. You either pay for the repairs or buy a new used car.

£3,000 to £5,000 seems a reasonable sum to have set aside.

That is part of my planning personally - ie £10,000 in case for me and for NHS bills (ie medical costs the NHS should cover - but wouldn't one way or another). As my house isn't constructed the way I'm used to/thought I'd have (ie it's rendered and painted concrete block walls - rather than red brick walls. Also it's got those concrete tiles on the roof, rather than the normal slate tiles). Grrrrrr....to both - as I want my bricks and slate - then I've mentally added in £10,000 extra for my house being in West Wales, rather than in a South Western English city way of building. I'm very very reluctant indeed to ever take out money for any renovation work that pops up because the house has been built "wrongly" imo - but added it just in case (ie on top of my "own" savings so to say). Basically I'm likely to dig my heels in and refuse to paint the outside ever again - I did it when I first bought the house (as it needed it and it wasn't in "my" colours) - but I won't be doing that again if I could help it.

Owt over and above that is mine to spend as and when I please - and I don't expect to "need" any surplus over and above that.

I don't need money for vets bills - I "borrow" other peoples cats sometimes if we like each other. I don't need money for car repairs - as I turned out to be such a bad driver I gave up the idea (darn it!).

At my age and with the vast majority of the house renovation having been done by me - and so recently - I feel I shouldnt have to spend on any maintenance work to think of for the estimated rest of my life (ie only little bits and pieces like the tv aerial on the roof went for a burden in the gales here - but I've now replaced it with one in the loft and a booster).

They say always have the euivalent of three months income in your bank or instant access ccount for emergencies and I reckon that having the euivalent of one years income, however much that might be, in long-term savings would be the ideal to aim at, anything else is just extra comfort.

I find the need to ‘save’ once you’ve reached the age of 75, is absolutely unnecessary. Enjoy your money, be generous with the children . Money is for spending and cross the bridge of care-homes, when you come to it.

I plan to go on some nice holidays uk and abroad. Not really exspensive hols. But I always keep 20k in savings for house repairs like roof or if something breaks down and needs replacing. Also dental treatments are exspensive like a crown could cost 850 these days. But nice to plan breaks away too after working for so many years

I'm 61 now and am spending ....done my saving and time to enjoy....just work 2 bank days a week....so lots of holidays ....when its gone its gone...think it will last a while tho....have my nhs pension and wage...so only need to spend for the big hols ( next one 3 weeks in Canada in march) ...and treat the kids and GC lots x

How do you define a rainy day?

I would not define planning for future care costs as a rainy day but a major consideration for the last years of our lives that we all need to think about as we age.

A rainy day to me means a single event, an unanticipated emergency cost, for example, sudden but unavoidable household repairs, a leaking roof, walls or fences wrecked in a gale or a broken household appliance. Or maybe the car that you hoped would see you through to when you no longer wanted to drive can’t pass the MOT without major work that will cost more than the value of the car. You either pay for the repairs or buy a new used car.

£3,000 to £5,000 seems a reasonable sum to have set aside.

Allsorts

With care homes here £70.000 a year, few people would have enough to cover an average of 10 years.

The average stay in a care home for an old person is 2 years, not 10. That figure is probably for people of all ages in care. My niece who is, learning disabled and autistic has lived in a care community all her adult life and there are maany like he

£70,000 is at the upper end for just residential care, but at the lwoer end if someone reuires specialist dementia or nursing care.

Surely it all depends on what you plan on after your retirement. Would your pension be enough to fund any potential travel plans? How often might you want to replace your car? What might your day to day living costs be in terms of general spending?
Savings isn’t a one size fits all scenario but you can’t take it with you and there’s no pockets in a shroud.

There's no way I'd save money personally for carehomes. It would be very upsetting to watch money just "heading down the drain" I'd feel.

I do think it's practical to have got oneself sorted out for as "easy" a home as possible - so the question of carehomes should never arise in the first place. Personally - the house I own is a bungalow and on a pretty level plot (it's astonishing just how many bungalows have things like slopes and steps in the garden), I've made sure the bathroom has a modern-size shower. If need be I might consider paying someone else to do a couple of hours housework weekly.

I just figure the odds of actually needing a carehome are very low as far as I can make out (and that's across the full range of housing) - hence not in the "must keep money aside in case" camp - and that's for people who'd be prepared to go into a carehome (which I certainly wouldnt personally).

I must admit it's very difficult to know just where to put savings all round - given that we're from a generation that remembers when one could readily walk into a choice of nearby building societies, put our savings in there and get enough interest to keep pace with inflation and some "real" interest as well and nowadays I'm blowed if I can even think of somewhere safe and accessible to put savings that will even cover inflation.

It is a bit of a quandary...

It's an awful lot more than that round here!

Allsorts

With care homes here £70.000 a year, few people would have enough to cover an average of 10 years.

I don’t think many people are in care homes for 10 years?

With care homes here £70.000 a year, few people would have enough to cover an average of 10 years.

Save if you can and spend if you can, but be sure to enjoy the here and now because none of us know what is around the corner.

Having been brought up very frugally, and having had a low income when the children were young, I am of the mindset to not spend money unnecessarily. So I have always saved, when I had the means to do so, rather than spend money needlessly.

When I inherited money from my parents, I had almost no savings, but by then I was in a position to start saving. As soon as I had saved the same amount as I had inherited, I passed on my inheritance to my children.
I still save. It may be needed to pay for my care one day.

Maybe a mix of both?