Subsidised childcare va care home fees

[MrBanana]

Discussing the introduction of 15 free hours for two year olds with friends (which I think is flawed but that’s not the point of this post). Friend 1 said childcare has to be made free. I disagree, there’s no political appetite for that. People of retirement age feel quite strongly that parents should be responsible for their own children. They’re the ones who vote in the largest numbers.

I don’t disagree, but I don’t agree that we somehow have it easier. We are told we have to be responsible for our own children. But we can’t now survive on one salary alone. Childcare is now more expensive and inadequately funded. Everyone I know with a two year old has seen their nursery bill increase in anticipation of the “free hours”
to compensate for it.

But then it struck me that these people are the same people who have “worked all their life” and don’t feel they should have to pay their care home fees and if they do, complain about it being unfair. Healthcare is still free to them, whereas we are finding it increasingly difficult to get a dentist for example.

It just struck me how hypocritical the whole argument is - we are supposed to be responsible for our children, by virtue of them being our children, whilst simultaneously working. But the current cohort of retirement age are complaining about, and want to avoid, being financially responsible for themselves! Most won’t have been paying taxes whilst receiving the benefits we’re now paying for childcare/dentistry etc.

Im not sure that’s the best structured argument but I hope I've made my point well enough to be understood.

I worked for 46 years and retired early at 62, during covid, that's probably longer than you will work, if it hadn't have been for covid it would have been 50 years.

Why will it be longer than someone else? I’ve paid NI since 17, the contributions required were tiny then & my state pension age is currently 68 but I’m a millennial so it’s likely to increase.

Well, you haven't done it yet have you.

Who said that? Not i?

The real issue isn't childcare vs care homes but the imbalance of wealth between the generations which is such that those women now in the childbearing bracket - roughly 20-40 - are financially screwed as the cost of a family sized property in some parts of the UK and childcare more generally is starting to look unaffordable. The recent thread on middle income earners financially struggling makes this really clear.

The real problem is that the over 45s have a grip on the property market both in terms of making big gains on their houses at the expense of the house price inflation pad by younger generations and because they also own the majority of rental properties (and are the ones befitting from the significant increases in rent in recent years - again at the expense largely of younger generations). Its actually house price inflation that makes childcare the straw that breaks the camel's back as 35 years ago a family sized property was generally affordable on one salary - this meant that a family could afford one parent stopping work to look after children or to decide to use one parent's salary to pay for childcare). Fast forward to now and house prices and rents are so high in some parts of the UK you need both parents to work to keep the roof over a family's heads and so the cost of childcare to keep both parents working becomes crippling.

The BBC had a good article on what is happening in South Korea where the birth rate is 0.55 - you need about 2.4 to maintain population - which frankly s where we are heading https://www.bbc.co.uk/news/world-asia-68402139 If population declines there won't be enough young working people to pay for anyone's carehomes (and probably not to work as carers either...)

People often talk about the great cheap childcare in Scandinavia. I'm pretty sure that Norway set up a fund from its North Sea oil and gas profits and childcare is subsidised from that as a national benefit for all the reasons outlined by a PP above. By contrast we set our oil and gas revenues far lower to benefit the likes of Shell and BP. Good article on that here https://tribunemag.co.uk/2020/12/how-north-sea-oil-shaped-britains-economy

Well, you haven't done it yet have you.

But statistically some people will…

Why is it on MN that posters think that everyone is going to end up in a care home, it's about 15%, I hardly know anyone who went into a care home, my parents both dropped dead and DH's both died after a short illness

@londonmummy1966 you’re correct. We have so much housing benefit going into landlords hands because not enough social housing. Housing & QE have screwed the economy.

Lots of older people do already get all their care paid for, many go into retirement having zero savings, some spend it all leaving nothing for when they need care.

Yes. Thank you for posting that.

And expanding on @londonmummy1966 the issues is exacerbated by people living longer in retirement during which time they are able to maintain and hang onto their wealth.

And what did you earn.

No they are not I was a child in 80's not one of my friends mothers worked.

I think a huge issue is that not working is actually something you’re forced into now - because it doesn’t pay to work, rather than a choice. That has a hugely detrimental effect on women.

@Helfs most people back then did not have childcare vouchers and looked after their own parents, unless they had dementia.

@DragonFly98 I was a child in the seventies. My mum and most mums of my friends worked. If you were better off you did not work.

Tax free childcare and free hours operate much like Tesco clubcard savings. They massively inflate the price to compensate. So you pay a reduction of the inflated price.

• “This has led to a large rise in the proportion of working-age mothers in paid work: up from 50% in 1975 to 72% in 2015. The rise has been particularly large among lone mothers and mothers of pre-school- and primary-school-age children.

• Overall, the proportion of couples with children where only one adult works has almost halved (down from 47% in 1975 to 27% in 2015) and the proportion where both work has increased from 49% to 68%.

What you earn is of little relevance when the basic rate of income tax + NI is the same as a higher rate tax payer pays now. I think I was paid about a tenner a week. I was really in the money when I hit £1k a year.

3 elderly relatives in this family have been self-funded in their care homes. They had the assets to pay and nobody expected it to be free.

TBH I look on it as something of a ‘luxury’ to be able to self-fund - you can choose the time and place - rather than being at the tender mercies of almost invariably time- and cash-strapped social services.

And I do wish posters wouldn’t judge all older people by the less reasonable ones they happen to know.

Tax burden has increased because of things like VAT

https://ifs.org.uk/taxlab/taxlab-key-questions/how-have-government-revenues-changed-over-time

Back then childcare costs weren’t more than what most earn

so you’ll haven’t paid enough in to cover the cost of what you’ve taken out throughout your life.

Those having children and working now are funding your pension and care if you need it. That’s why it’s silly to begrudge support with childcare, as who do you think suffers if they stop working

It might not pay to work in the short term, but you only have to pay for childcare for a relatively short time, you need to balance the cost out against future earnings too (lots of women have to take a lower paid job if they take a complete break) and effects on pension.

I think we also need to look at why is it only the woman's salary that is used for comparison and why do so many women still earn less than their partners before they have children? This always skews the decisions about who is going to go part time/stay at home in favour of the men.

“House prices are currently sitting at 8.8 times the average earnings, more than doubling since the 1970s, according to new research from House Buyer Bureau”

”The research shows that the average house price throughout the 1970s sat at just £9,277, the equivalent of £68,493 today after adjusting for inflation.”

”In the 1970s and 1980s, real wages growth averaged at 2.9%, but fell to 1.5% in the 1990s and 1.2% in the 2000s.”

I didn’t always earn £10 a week, you silly sausage. That was in 1972. I was a higher rate taxpayer for over 20 years. I paid in plenty.

Nobody’s going to fund any care I need except me. I imagine my house will be sold to pay for it.