Your parents planned for retirement, not for 100

But there could be an important twist to this story. The generation now in their late seventies and eighties is living longer than any before it. And those extra years are a sign of something positive: better healthcare, better living standards, and the possibility of a longer, richer later life.

Living to 95 is no longer unusual. Living to 100 is no longer remarkable. The Office for National Statistics estimates that there were 16,600 centenarians in the UK in 2024, roughly double the number in 2004.

But it does mean one thing: many retirement plans created in people’s fifties and sixties were designed for a shorter retirement than the one they could now enjoy, which means the same pool of wealth may need to fund more years of living costs, and potentially significant care fees.

When families say, “Mum and Dad are comfortable,” they are often picturing everyday living costs: groceries, utilities, meals out, trips away, and perhaps a bit of help around the house and garden.

What they might not be considering is how those same finances would cope with the cost of residential later-life care. Yet this can be one of the largest expenses a family will ever face.

Research reported by Which?, using LaingBuisson data, shows the average weekly cost for a residential care home for a self-funding resident is around £1,278, while nursing care averages £1,594 per week. That’s roughly £66,000 to £83,000 per year.

Many families take comfort in the idea that, if care needs become primarily medical, the NHS may step in to fund support through NHS Continuing Healthcare (CHC). And in some cases, it does.

CHC can be hugely valuable for those who qualify, covering the full cost of care where needs are considered primarily health related.

However, eligibility is assessed carefully and can vary by region. The Nuffield Trust reported that in early 2024, around 21% of people assessed through the standard CHC route were found eligible.

For families, the helpful way to think about CHC is as possible support if circumstances allow, rather than something to rely on from the outset.

Planning on the basis that care may need to be privately funded, and treating NHS support as a welcome relief if it comes, tends to create the most resilient financial plan.

For many years, retirement planning followed a familiar pattern: working life, an active retirement, and then a relatively short period of increased support at the end.

What’s changing is not the principle of planning, but the length of retirement itself. Many people are now spending 30 years or more outside the workforce, and some of those years may involve increasing levels of support or care.

That has practical implications.

Financial decisions made in someone’s sixties, particularly around large gifts, trust planning or inheritance tax mitigation, were often based on assumptions about life expectancy. If retirement now lasts 30 or 35 years rather than 20, those assumptions may need revisiting.

The question is not whether previous planning was wrong. It is whether the plan still provides flexibility. Does it leave enough money if care is needed? Does it allow choices to be made calmly rather than under pressure?

Seen this way, longevity doesn’t undo estate planning. It simply changes the order of priorities: ensuring care can be funded comfortably comes first, and inheritance then flows from what remains.

Once the possibility of later-life care is factored into a financial plan, the next question is how that care would actually be paid for. The answer is not always straightforward, as the rules vary across the UK and depend on a person’s income, savings and circumstances.

How care is paid for depends on where someone lives in the UK and on their financial situation. The rules are different in England, Scotland, Wales and Northern Ireland, and they are updated regularly.

In England, care is means-tested. For 2025–26:

• If a person has more than £23,250 in capital, they are expected to pay the full cost of their care themselves.
• If their assets fall between £14,250 and £23,250, some local authority support may be available, but contributions from savings are still expected.
• Only when capital falls below £14,250 does the council contribute without using capital (although income such as pensions is still taken into account).

In Scotland, the system works differently. Personal care and nursing care for those aged 65 and over are not means-tested, and the Scottish Government makes a contribution towards these elements. However, accommodation and living costs in care homes remain subject to financial assessment, and capital limits still apply.

In Wales, the capital limits and charging structures differ again, including a capped weekly charge for residential care set by the Welsh Government.

In Northern Ireland, the system broadly mirrors England’s, with means-testing based on capital and income determining whether someone must self-fund.

Wherever someone lives, one important point often comes as a surprise: if a person moves permanently into residential care and no close family member is still living in the home, the value of the property can be taken into account when assessing how their care will be paid for.

At this point, many families are reassured to learn that councils can offer what’s called a Deferred Payment Agreement (DPA). This allows care fees to be paid on the person’s behalf and settled later when the home is eventually sold.

A DPA can remove the immediate pressure to sell a home during a stressful time. However, it’s important to understand what it involves. It works like a loan secured against the home. Care fees continue to build up over time, with interest and administration charges added.

While the agreement is in place, the property is not counted when the local authority works out how much the person should contribute, which is why support can continue.

When the property is eventually sold, the amount owed under the DPA is repaid from the proceeds. If the person is still alive and there is money left after the loan is cleared, that remaining amount may then be taken into account when assessing how their future care will be funded.

While it’s important to revisit existing plans to ensure they’re still fit for purpose, conversations are often easier than expected when framed around preferences rather than problems.

“What would good care look like to you?”
“If staying here became difficult, what would feel right?”
“What matters most if more support is needed?”

Approaching the subject in the right way allows families to plan constructively.

A financial planner can help model plans beyond average life expectancy, sometimes to age 100, to test how different levels of care costs might be met. This focuses not just on the overall wealth, but on how and when it can be accessed.

At the same time, practical steps such as ensuring wills and lasting powers of attorney are in place well before they are required help create clarity and flexibility for later-life.

Longer lives are a sign of progress. With the right planning, they don’t have to create uncertainty; they simply become another stage of life to prepare for.

For adult children, the priority is ensuring that comfort, flexibility and choice are protected if those later years stretch further than expected. Once that foundation is secure, estate planning becomes far more straightforward.

An Amber River adviser can help you model longer life expectancy, understand potential care costs and review inheritance planning in that context, bringing clarity and reassurance to what can otherwise feel like a sensitive conversation.