If people aren't owning homes how will the country afford care for the elderly?

[liltingleaf]

Saw on the news that less and less young people are getting on the housing ladder because of rising house prices.

However, I was thinking, at the same time a large proportion of people release assets from their home to be able to afford nursing care in their old age. If this cannot happen, how will people/the country afford nursing care for an increasing number of people without an asset to fund this?

[NotSuchASmugMarriedNow1]

Increase taxes

[FeedtheTree]

NotSuch that would work if more people had full-time jobs not zero hours short term contracts.

[000bourneFarm]

Once the proportion of people who cannot afford their own homes rises they will be massive unrest and a swing towards socialism on the back of a ticket for major housing reform. Landlords will see no economic sense in holding property through those reforms though they will grimly hang on for some time. Eventually, through a system of incentives for social house builders paid for by higher taxes and penalties on smaller landlords more housing will come forward. These reforms will be bigger than those in 1988 which had the longer term effect of pushing prices up. The topical news on this issue over the last few months leads me to believe ever more this is where we are heading.

[TinaMena]

Its for the generation after next to worry about

[Buglife]

My parents have said they’d like to sell up their house and rent a small flat in a few years time. They will have state pensions and both have other pensions too, so they think they’d have enough to live on. Then they could give me and my sibling half the house profits each, so it doesn’t all go to pay for care if they need it. I am not very comfortable with taking their money before they die, but then I have a house and should be moving to a bigger house soon where I could potentially house one of my parents should they need it ever. My sibling doesn’t own a home though so I can see that they would benefit greatly from this plan. It’s difficult. They desperately don’t want to leave us with nothing. My DM worked in admin in care homes for a while and she said so many long term residents seemed to think they were ‘private parients’ When really all their money had run out long ago.

I am going to try my best to provide care for my parents when they need it but obviously I know this isn’t always possible with more complex needs. I don’t know whether it’s immoral to try and ‘beat the system’ by distributing your assets before you need to pay for care, or whether people should now expect to not leave anything for future generations but to know their houses and money will be paying for their old age.

[hatgirl]

The vast majority of people don't end up needing nursing or residential care.

Advances in technology are meaning that some people are able to stay in their own homes longer.

We are on the brink of huge changes in the social care sector, new funding rules were supposed to be implemented in 2015 but are currently on hold until next year. There is no way that the current system will still be in place in the next few decades when this will only just be starting to become an issue. The current generation of 30 year olds are still generally 40 - 50 years away from possibly needing care, that's a long time to assume that the current status quo regarding care funding rules will remain. It won't.

Many people are kept alive to very old age by advances in medicine and in this country and by the NHS. The NHS is doomed in one way or another and once that happens people might not start to live quite as long as they do now. The flip side to that is that there are huge advancements being made in Alzheimer's treatment so hopefully if people do live longer they won't be living with horrific Alzheimer's with the same regularity they do now.

[Lovesagin]

But now people don't have to sell their homes?

[hatgirl]

Buglife what your parents are proposing would probably be considered deliberate deprivation of assets by their local authority under current funding rules.

Proceed with caution if that's really what is being planned. Otherwise you might find they still have to pay for care even once they have given all their money away.

But like I said, it's the vast majority of people don't actually end up in care homes.

[ohfortuna]

Once the proportion of people who cannot afford their own homes rises they will be massive unrest and a swing towards socialism on the back of a ticket for major housing reform
I think this is the most probable scenario

[Fairylea]

I’m not sure people do sell their homes to finance care as much as people think. I know a lot of families who put their parents houses into their names as they get older to stop the government from accessing funds for care etc / forcing them to sell. It’s a lot more common than people think. (I used to work in a coveyancing department).

[Buglife]

To be honest their main issue with doing it is that they live in a very cheap housing area and would like to relocate closer to me which is a high cost housing area. And therefore as they wouldn’t be getting a mortgage renting would be their only option. Helping my sibling financially would be a big bonus to them. Neither have any health issues as yet. At what point does choosing to rent and sell up become in danger of depriving the Council of assets, if you had no particular reason to believe you were in imminent need of care? My parents are in their early 60’s. And not high wealth individuals. Their only asset is their modestly priced semi! It’s tough because noone wants to do something dodgy but when do you start worrying that you can’t make your own decisions regarding finances? And I would if needed be happy to pay towards parents care costs with money they’d given me if I had to. Again my greatest wish is I can assist and care for them at home with nursing help if needed, and I’d pay for that as long as I could too.

[ohfortuna]

Also there are elderly people who use equity release schemes to enable them to stay in their homes stay in their homes
that usually means there is no equity left in the property so it can't be sold to pay for care

[hatgirl]

Yes but local authorities have massively cracked down on it in recent years Fairylea as it's deliberate deprivation of assets and local authorities can no longer afford to turn a blind eye to it. Local Authorities can and do take people to court for doing precisely what you describe.

Just because people do it and think they will beat the system doesn't mean it actually works out for them in the long run.

[Buglife]

So is the issue that past a certain age (say 60) a decision to sell house and rent and give money to relations would be seen as an attempt to dodge Care Home fees?

[Kursk]

BugLife

My parents are planning on doing the same thing. Dads words were “ I worked hard to look after my family not to give it to the government”

I dont think what he is doing is immoral, I think he is doing the right thing, the goal posts have been moved since he started work.

However to answer the OP’s question, I suspect there will be a massive swing to socialism in the UK at some point in the future. Which will attemp to fix the housing situation, but won’t, because socialism doesn’t work.

[Kursk]

So is the issue that past a certain age (say 60) a decision to sell house and rent and give money to relations would be seen as an attempt to dodge Care Home fees?

In a nutshell yes, your parents would have to be less obvious about it.

[Lovesagin]

There is a way around avoiding the tariff local authorities try to put on people's homes when it is sold but I think it definitely needs solicitor advice on how to do it. Me and mum are going to see one next week to discuss it.

[Shinesweetfreedom]

Well something is going to have to give.At the moment billions per year is paid in housing benefit and this is only set to grow with more and more people unable to afford their own homes.Added to which those that are working and paying rent,when they retire this will increase the housing benefit bill further.
Until housing becomes more affordable,and I mean much more affordable,to the levels of twenty,thirty years ago,then all financial and social aspects of life are going to keep getting worse.
Unfortunately governments only run for what will keep them in power for the 4 year period.Their agenda is to keep house prices high,even interfering by ways of help to buy.
The rental sector is too big,yes rental is needed,but too many landlords have pushed the price of housing too far.Unfortunately many M.P.'s are landlords too and are not heavily going to vote against themselves.
But the tide is turning.

[hatgirl]

I think what people miss when they decide to give away their assets in an attempt to avoid care home fees is that what they are essentially giving away is any choice they may have had if they do need care.

If you want the state the pay then the state also subsequently chooses which care home you end up in. The more money you have available to you in your old age the better standard and quality of care / nicer room/ facilities/ food you can choose to have.

[Buglife]

Interesting, my DM always said there was no difference in standards of room/care between paying and state paying residents in her care home. This is in an area where majority of housing was Council though so majority of residents would have been payed for by the state. Also we were very lucky when my Nanna had to go into a care home with dementia it was brand new and was honestly lovely, like a hotel. They did many activities and I wasn’t under the impression her standards were lower than anyone else’s because she was paid for by the state. Obviously there are more exclusive residential homes and sheltered housing, but I think when you get to the point of serious nursing requirements it doesn’t differ?

[ArcheryAnnie]

Dads words were “ I worked hard to look after my family not to give it to the government”

Except if you are using it to pay for long-tern residential care then you are paying for a service, a home, not "giving" it to anyone.

I think it's complicated, and I am prepared to change my mind on this, but at the moment I broadly think that if you have assets tied up in a home and you are moving permanently to residential care, then it's fair enough that you should use the money derived from your previous home to fund your next home. And if you don't have any assets then - just as younger people do, with housing benefit - you should be provided for by the state. Nursing care should be provided for through the NHS.

[liltingleaf]

My own grandparent's care was payed for by an annuity bought from the proceeds of their house sale. I think there would have been very few choices if this option had not been available. They needed dementia care.

Made me think with less people being able to afford to buy their own property.

[Ladymayormaynot]

Prior to needing care, generation rent are going to have to continue paying rent well into their pension years. How will they manage to do that once their income reduces or retirement? the same generation have been sold second rate pension schemes totally dependent on the stock market and very few have spare cash to top up their contributions. With the retirement age creeping up all the time I think the government is hoping many will actually drop dead of exhaustion and that will solve the problem.

[Kazzyhoward]

The recent changes to taxation of landlords, i.e. changes to tax relief on contents, and restriction of tax relief on interest, WILL mean many private landlords will sell up as the sums just don't work anymore if they have mortgages etc. They don't yet realise how badly it will hit them, but during the transition period of the next 3 years, they'll see their tax bills rise (sometimes higher than the profits they make) and will have to sell. A glut of landlord's selling will act to steadying or reducing house prices, making them more affordable to people who actually want to buy their own home to live in.

[Kazzyhoward]

my DM always said there was no difference in standards of room/care between paying and state paying residents in her care home

It's not just standards, it's choice. If you're paying yourself, you can pick and choose your own home. If the state is paying, they may well give you little or no choice.

There are also more subtle differences you may not see, such as those paying privately may get a room with a better view, a bigger room, or an en-suite.