This week on The Vault, a listener wrote in with a big question.
Her mum passed away a few years ago, quite young. Her dad has just been diagnosed with dementia and she’s found out that everything he built – his home, his savings, a lifetime of work – could be swallowed up entirely by care costs.
She asked:
What is the point of saving and building for the future if circumstances can just take it all away? Should I be living for now instead?
As she said, there’s no clean answer, but here’s how we think about it.
Why ‘save everything’ and ‘spend everything’ both fail you
We’ve all got a version of this story somewhere in our lives. The person who worked every hour, saved every penny, never opened the “special” bottle of wine because they were waiting for the right occasion, and then never got to. We lost our uncle the year after he retired. He’d worked so hard, and it was finally his time to relax, but he didn’t get to.
And then there’s the other version. The person who spent it all, lived entirely in the moment, and gets to their 60s without the freedom to do anything they want to do. They can’t move to the seaside or travel, or stop working when they need to, because they either didn’t think to save or had a “what’s the point” mindset that stuck.
Neither extreme works and we genuinely cannot know which version we’re heading for.
So the answer – and we know it sounds like a cop-out but it really isn’t – is the middle.
How to find a balance between the two
A budget that gives you real breathing room (here’s how to create one you can actually stick to). One where you can eat somewhere nice, go on holiday, shop at M&S if that’s your thing, treat the people you love. That bit matters – you have to be living while you’re building.
But also an emergency fund that’s actually sitting somewhere generating a return, giving you peace of mind. And an excess – whatever’s left after your expenses – being put towards your goals.
Here’s the thing about that excess. If you save it and get to use it in retirement – brilliant. If life takes a turn and it covers your care, that care is still your money looking after you. If you pass away before you can spend it, a pension can pass to your children and their children. It’s still an asset. It’s still worth something to someone.
None of those outcomes make the saving pointless. It’s always going somewhere that matters.
What you can actually do about care home fees
We’re not lawyers, and we’d really strongly encourage you not to try and DIY this one. But it is worth knowing that there are legitimate, legal ways to structure how you own property – particularly if you’re a couple – that can offer some protection.
A wills and trust solicitor can walk you through it properly. And by the way, it’s not dodgy or “escaping” the system, it’s just making sure things are structured in a way that’s fair to your family. Get a regulated solicitor, not ChatGPT!
Don’t forget life insurance
Life insurance doesn’t form part of your estate so care home fees can’t touch it. And for somewhere around £15-£30 a month (depending on your age), it means that even if everything else gets eaten up, there’s still something left for the people you care about.
Head to https://financielle.com/protection/ or give our partners at LifeSearch a ring – no obligation, just a chat. You could genuinely sort it in a lunch break.
What you can control (and what you can’t)
We can’t control dementia or future care costs. We can’t know whether we’re going to be here until 105 or whether life has other plans.
What we can do is make sure the balance is right. Live well now, have the safety net, use your excess well (follow the Playbook!), don’t hoard the wine for an occasion that might never come, but don’t blow everything either!
So be honest – which side do you lean on? Are you saving so hard you’re forgetting to live? Or living so hard you’re not building anything for later?
This content is for general information only and does not constitute financial advice. If you need advice tailored to your personal circumstances, please speak to an authorised financial adviser.
Financielle is an Introducer Appointed Representative of LifeSearch Partners Ltd, which is authorised and regulated by the Financial Conduct Authority. FCA Registration Number: 656479.