To think we have to accept that we need to use savings to fund care in old age

[LastDuchessFerrara]

My parents died before reaching old age but I'm now watching family and friends caring - in one form or another - for older relatives.

Many seem to be in denial about the fact that savings, pensions and, in some cases equity in their home, needs to be used to enable their relatives to continue to stay in their homes or go into care.

"But they've worked all their lives!" they cry in protest. Well, yes - and now that money needs to be used in their old age.

It's really focussed my mind on how any money I accumulate might not be spent on amazing holidays but paying for cleaners and carers.

I'd be interested in views but please can this not be a "boomer" bashing thread. I know plenty of impoverished old people and plenty of entitled non-boomers.

It really isn't comparable to education, though. We spent (in 2018, I can't find a more recent figure) £5k a year on a primary school student and £6.2k a year on secondary. That pays for a month or two of care. Health care is balanced on the fact that very heavy users (disproportionately the elderly) are counter balanced by the many people at any one time paying in but who are lucky enough to not currently use the service.

It's also the length of time that people are now reliant on state funding in old age (including pension) - it was a system set up to support people for a few years, now there are increasing numbers of people who spend as long retired as they did in work. That isn't sustainable, but nor is it sustainable to try and just make people work until older and older - because, sadly, life expectancy has increased faster than healthy life expectancy. Expecting tax payers to pay for all of this is expecting everyone of working age to have a lower income so that a lucky proportion of them get 'their' inheritance intact, and I just don't see the fairness in that.

So taxes are increased, relative to income, to provide a basic level of care that everyone is entitled to, with expensive private options for those that can afford it?

Income tax is high enough! Raise it any more and you risk putting people off wanting to earn more or progress in their careers as they’d be better off financially not taking a promotion.

For a lot of people over half their income is already taken in tax! It feels almost like punishment for all the years and expense of studying, all the hard work people put into a career and the sacrifices they make to earn a good wage, like paying thousands a month for nursery.

@hikeforward so if we don't pay more tax and you think it's unfair for people to pay for their care what do you propose?

‘Someone is getting rich of the private care system it seems’
But there would be care homes on every corner if this was the case

There are. And the carers are paid a pittance. I worked in at least 8 homes (over a decade ago mind) and the owner/mangers used to scrimp on all sorts. One home didn’t provide gloves for carers, I bought my own and was laughed at for being ‘fussy’! Other homes used communal flannels for bottoms instead of wipes then put them all in a hot wash with the face flannels!! Cheap food. Like porridge only for breakfast. Not enough staff. Not enough pillows. Old equipment and equipment I know now is unsafe (and was illegal even back then though I didn’t know it).

What all these homes had in common was the pretty grounds with trees and duck pond, the plush entrance hall which gave the impression of ultra luxury, the grand piano in the lounge...

I think Hike's comment confirms what I said about there being little appetite for higher taxes which would be needed.
And Hardbackwirter makes very good points about the huge burden and costs on the current working generation. And why should that current working generation who won't get the house value uplift as the boomer generation did, pay so that those who have valuable property can pass it onto their families?

No, as much as people don't want to pay and don't like the fact some people get their care funded, those who can pay will need to continue doing so. Really there is no alternative when you think about it all.

Ultimately, it's a great shame that lots of people need intensive and espensive care at the end of their lives. But that's where we are as a society and where possible, people need to self-fund.

@HikeForward

So taxes are increased, relative to income, to provide a basic level of care that everyone is entitled to, with expensive private options for those that can afford it?

Income tax is high enough! Raise it any more and you risk putting people off wanting to earn more or progress in their careers as they’d be better off financially not taking a promotion.

For a lot of people over half their income is already taken in tax! It feels almost like punishment for all the years and expense of studying, all the hard work people put into a career and the sacrifices they make to earn a good wage, like paying thousands a month for nursery.

Then you’re going to have to make up your mind what you want. Either you pay (much) higher taxes and everyone gets free care in old age or you pay relatively low taxes and pay for care yourself. You can’t have it both ways.

@HikeForward

So taxes are increased, relative to income, to provide a basic level of care that everyone is entitled to, with expensive private options for those that can afford it?

Income tax is high enough! Raise it any more and you risk putting people off wanting to earn more or progress in their careers as they’d be better off financially not taking a promotion.

For a lot of people over half their income is already taken in tax! It feels almost like punishment for all the years and expense of studying, all the hard work people put into a career and the sacrifices they make to earn a good wage, like paying thousands a month for nursery.

This is nonsense.

393,000 people in the UK in 2018-19 were additional rate tax payers, meaning that they pay 45% tax on income over £150k. No one has their income taxed at 50% or more. About 4 million people are in the higher rate tax bracket, paying 40% on income above £50,000. That is out of roughly 31 million income tax payers in the country.

60% of all income tax paid by the top 10% of taxpayers.

Maybe we should adopt an approach from Finland and have fines for motoring offences directly related to income. That might raise a bit of extra cash. Nowhere near enough but we could work up from there 😊

Ultimately, it's a great shame that lots of people need intensive and espensive care at the end of their lives. But that's where we are as a society and where possible, people need to self-fund

But why should half of society fund their own care when the other half doesn’t? Why can’t the government ensure all care homes are monitored, reasonably priced, or ideally free to all, without taking more tax from the people already paying nearly half their income in tax?

It feels like some people are constantly giving their earnings and savings to subsidise others. Like some are constantly giving to the system and others constantly taking.

I’d like to see large businesses taxed more instead of individuals being taxed further.

But why should half of society fund their own care when the other half doesn’t? Why can’t the government ensure all care homes are monitored, reasonably priced, or ideally free to all, without taking more tax from the people already paying nearly half their income in tax?

Because the money has to come from somewhere. How can you supply something that’s “free to all” without someone, somewhere paying for it? Everything is either paid for by the consumer or the taxpayer, there is no other source of funding.

I’m not sure what the answer is but really it quite unbelievable that you receive free (at point of use) medical care your whole life then once you’ve stopped working, hit a certain age and need care you’re expected to find what, the equivalent of a years private education to pay for your care?

@countrygirl99 that’s actually not a bad idea! Everyone pays £X amount regardless of income then it increases based on income. I like it.

Hike, it is the case that in an unequal society, in terms of taxes and benefits, there have to be those who are net contributors (paying in more in taxes than they get out in public services or benefits) and those are net receivers (getting more out than they pay in via tax)... Of course ....there is a redistribution of income going on. All societies do it to one degree or another.

There is quite simply recognition that if there is no government intervention, some would be so poor as to be without housing, food, healthcare, education or anything and some woukd die. As a society we don't think this is acceptable and intervene to redistribute income and in giving to some, others (who can afford it) pay and those with highest incomes pay proportionally more.

I'm astonished by your post asking why there can't be a basic standard provided to all for free, without taking more tax in from people. You know these care home places are hugely expensive and surely it's obvious that the money has to come from somewhere.

Essentially the richer people in society will have to pay....either directly for their care home places as they are needed, or via higher taxes to fund everyone.

Perhaps there could be a tax on those with properties to fund the care homes......oh, but those with property want to keep it to pass it to their families and not pay. And they won't want to pay higher taxes through their lives to fund everyone either. They just don't want to pay, but they want the service provided, rather like Hike does. When people think about it, they should be able to see that doesn't add up.

We need Care ISAs. Squirrel away tax free money which will sit and wait for if you need it for Care in the future.

Why an earth isn't there a tax on property inflation that could subside social care?

My mum inherited my grandads house last year worth £400K. He bought it in the fifties for TWO GRAND. No IHT as it was both his and my grandmas so was less than the allowance. Obviously its benefited my family immensely but I completely don't understand why the government is swooping in on that kind of unearned income. Fair enough exclude the price paid to appease all the 'I worked hard' brigade but the inflation amount is fair game surely?

I bet the government could raise heaps to spend on social care so that everyone who needs it gets a certain amount funded by the state.

It is quite sad that its luck of the drawer whether you get the type of illness where the NHS will care for you or a purely degenerative one where they won't. At least taxing property wealth all round goes some way to reducing that inequality no?

** draw!!

@AlwaysCheddar

If I get a stage where I don’t have a clue what planet I’m on, id rather someone put a pillow over my face than pay thousands on a grotty nursing home.

For what it's worth, I looked up costs for Dignitas myself - approx 15k. Well worth saving that at the very least.

I couldn't bear to go into a home.

@BernadetteRostankowskiWolowitz

We need Care ISAs. Squirrel away tax free money which will sit and wait for if you need it for Care in the future.

That’s genius. Then if you don’t need it, your kids get it. Can you be Chancellor @BernadetteRostankowskiWolowitz? There isn’t a single down side to that.

Sprocket, agree totally - 10% CGT on increase in property price when it's sold across the board. Also wouldn't have an issue with a10% IHT across the board either (and more for estates of higher value) and the legislation in place to stop avoidance.

Why an earth isn't there a tax on property inflation that could subside social care?
because people wouldnt want to take the hit, so much wealth is tied up in property, all the rich people would do everything they can to lobby against it
the wealthy have all the power and they use it to protect their advantage, it's very hard to change a system when it's controlled by those who benefit from it...which it always is
(not that we should stop trying to make things fairer)

Totally agree with him. My patents list everything to care but their friends who spent their money on living got it paid for nothing. X

Absolutely no way that a PENNY of my inheritance to my children is going on a care home so the owner can swan around in a Maybach paying the staff peanuts to park me in front of Peppa Pig on rotation. Pass the pillow!

@Bluesheep8

If I get a stage where I don’t have a clue what planet I’m on, id rather someone put a pillow over my face than pay thousands on a grotty nursing home.

I understand the sentiment, I really do. In reality, it's very difficult being the child/relative in this situation.

Without a doubt. This is what my mum is asking me for now. Not the pillow exactly but to find a way to let her die. Very difficult.

@o8O8O8o

Why an earth isn't there a tax on property inflation that could subside social care? because people wouldnt want to take the hit, so much wealth is tied up in property, all the rich people would do everything they can to lobby against it the wealthy have all the power and they use it to protect their advantage, it's very hard to change a system when it's controlled by those who benefit from it...which it always is (not that we should stop trying to make things fairer)

It wouldn't be a hit though if it was only due when you sold up/died?

Agree that the wealthy people in charge wouldn't have any incentive to do this though!

I have quite strong feelings about this.
No OP I don't think people should have to use savings to fund.

My investigations into the 'end of life' have showed that even in other countries like the Dutch and Belgium, legal euthanasia, is so tied in to law/legal , and there has been little movement in the laws for years and years, that often people can't get what they want.