Healthcare: the cost most people don’t plan for in retirement

Most of us spend years planning for retirement.

We think about where we’ll live, how we’ll spend our time, and how to make our money last. We budget for holidays, hobbies, helping family, and everyday living costs.

But there’s one area many people quietly hope they won’t have to think too hard about: healthcare.

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“I’ll deal with it if it happens”

For a lot of people in their 60s and 70s, the assumption is simple: If I ever need private healthcare, I’ll just pay for it at the time.

Sometimes that works. But often, healthcare costs don’t arrive neatly or gradually.

They tend to show up:

• when something starts to affect your mobility or independence
• when NHS waiting times feel too long to live with
• when you want reassurance or answers quickly
• when decisions need to be made under pressure, not months in advance

In those moments, “I’ll just deal with it” can turn into a difficult, stressful and expensive choice.

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The reality of self-paying for healthcare

Paying privately for healthcare later in life isn’t unusual. In fact, it’s becoming more common. The self-pay market has increased by 30% since the pandemic, currently sitting at £1.6bn (source: Laing Buisson) and growing.

People often self-fund:

• consultations or scans to investigate new symptoms
• cataract surgery to restore vision
• joint or mobility procedures to stay active
• treatments that improve quality of life rather than address emergencies

Individually, these costs might feel manageable. But they’re often:

• unpredictable
• uneven (nothing for years, then a large bill)
• concentrated in later life, when health issues naturally become more likely

What’s easy to underestimate is how quickly these decisions stack up - emotionally and financially.

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Health isn’t just medical. It’s financial too.

One idea we talk about a lot at Lateral is this: your health is one of the most important assets you have in retirement.

When your health is good:

• you stay independent for longer
• you have more choice over how you spend your time and money
• your finances tend to feel more predictable
  
  

When health issues creep in:

• spending becomes more volatile
• plans change quickly
• decisions feel more stressful

Unlike market ups and downs, health changes are often gradual and hard to reverse. Ignoring them doesn’t remove the risk - it just postpones it until it’s more disruptive.

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Why “all or nothing” healthcare planning doesn’t work well

Traditionally, people tend to fall into one of two camps:

1. Rely entirely on the NHS
The NHS does extraordinary work, particularly for emergencies, complex conditions and long-term care. But waiting times for diagnostics and elective procedures can be frustrating, especially when quality of life is affected.

2. Buy fully comprehensive private medical insurance
For many people over 60, this becomes increasingly expensive over time. Premiums rise, excesses increase, and cover can feel unsustainable just when it’s needed most.

However there is a large and growing middle ground between these two extremes - and that’s where many people end up by default, through ad-hoc self-pay and reactive decisions.

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A more deliberate way to think about later-life healthcare

A growing number of people are starting to take a more structured approach, asking:

• Which healthcare costs are actually most likely for me?
• Which ones would be disruptive or stressful to fund unexpectedly?
• How can I keep costs predictable without over-insuring?
  
  

This mindset isn’t about medicalising retirement. It’s about:

• staying active and independent for as long as possible
• spotting issues earlier rather than later
• reducing the risk of large, unplanned bills
• having support when decisions need to be made

For many, that feels far more manageable than hoping nothing goes wrong or dealing with everything at the last minute

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Planning for health, like you plan for everything else

Most people wouldn’t plan their retirement income on the assumption that nothing unexpected will ever happen.

Healthcare deserves the same level of thought.

That doesn’t mean covering everything. It means understanding the most common later-life health costs, thinking about how you’d want to handle them, and choosing an approach that fits your life and finances.

When health is treated with the same care as wealth, retirement planning becomes calmer, clearer - and far more resilient.

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A question worth thinking about

If you needed a scan, consultation or procedure sooner than the NHS could offer it, how would you want to handle the cost - calmly and planned for, or reactively and under pressure?

At Lateral, we spend a lot of time thinking about how people in their 60s and 70s can plan for healthcare in a way that feels affordable, predictable and supportive.

If you’d like to explore that way of thinking, you can learn more here. (Health insurance page)