Care reform: Be prepared - whatever the politics, free care for the elderly cannot last for much longer

1 Accept the change

The bottom line is that, economic challenges or not, the current policy regarding free care for the elderly is unsustainable and personal funding will soon be needed to subsidise the costs.

Although this is likely to be a gradual process, personal care will increasingly become a stage of life for which we must financially prepare while we can, much like a pension.

2 Think positively

Harbouring negative thoughts on the subject of elderly care will simply make the subject more difficult to face, and this will ultimately lessen your motivation to prepare for it financially.

It is, in fact, just another life stage like buying a house, having children and retiring, for which you plan in advance to ensure the best possible quality.

3 Act sooner rather than later

Elderly care may seem a long way off but that doesn't mean it can go to the bottom of the preparation pile. Getting to grips with things in advance will ultimately make the entire experience easier to manage at the time; giving you more options and better control over how care is funded when required.

Don't bide your time in a bid to see how the situation unfolds. At best, public funds will be subsidising care costs on a minimal basis: waiting for this to be officially confirmed may leave you with insufficient time to prepare.

4 Know your options: care

There is a wide range of options to take into consideration from full time to part-time, domiciliary to residential, supported living to nursing.

The choice depends on the individual and his/her needs. Make sure you understand the costs involved with each option to avoid any "hidden" costs going unaccounted for in your financial preparations.

Don't let the money solely dictate your decisions - always evaluate the cost with the quality and suitability of the option.

5 Know your options: financial

Firstly, estimate the costs of the various care options and consider which may be best for you. Look at funding and preparation with this financial target in mind and work from there.

Your funding options will be largely dependent on individual circumstances. The most common include capital and investment returns, savings schemes and dedicated care plans, which operate like an insurance policy.

As the situation moves further toward personally funded care, more options are likely to become available, so it's worth keeping abreast of the situation.

6 Seek advice

Avoid falling victim to common assumptions.With the present policy, for example, many do not realise that elderly care is only free-of-charge to those deemed unable to afford it; those with over 22,750 in savings or assets are required to contribute.

Personal care planning is one of the most complicated, yet rarely discussed financial scenarios and it is easy to feel overwhelmed.

Take advantage of all the advice available, both professional and from those with practical experience of their own.

7 Talk about it

Elderly care may pose something of an unusual topic for discussion, but talking it through with those involved will make things much easier to plan and see through.

The nature of care funding poses a less clear-cut financial situation than, say, a pension. There are usually others affected and, when it comes to putting one's plan into action, the decision may no longer be yours. It is often worth putting wishes and instructions down in writing and considering a power of attorney to relieve the pressure on those executing your wishes.

8 Break it down

Independence rarely disappears overnight and you're likely to have more than one set of needs during your elderly years. When reviewing your options and estimating the costs, think about different stages and degrees of care required.

For example, many find they are happy to stay in their own home for a few extra years with a visiting care package, while others may opt for a form of sheltered housing or supported living prior to full time residential care.

9 Scenario planning

Plan for more than one scenario as things may change. Consider a few alternatives and test your financial plan against them all to ensure it is suitably flexible. Some of the most common scenarios in our experience include the early and/or unexpected onset of dementia, requiring full-time specialist care; reduced physical independence through illness or accident; and the loss of a spouse increasing one's care needs.

10 Contingency

It's not always possible to prepare for the unexpected, but it's a good idea to have some form of back-up.

Care may be required earlier on in life than expected, medical needs may be more costly than average and your financial preparations may not bear as much fruit as anticipated. It's advisable to over-estimate costs from the outset, which will give you a level of financial flexibility and ensure you prepare an extra something over and above your core funding source.

• For more information see www.schealthcare.co.uk or call the helpline on 0800 174 558.