Potentially, another national insurance tax increase to pay for social care

[Toodaloo1567]

Just stumbled on this and wondered about everyone’s thoughts. Essentially, the government is being advised to increase national insurance to pay for elderly social care. I’m not keen. apple.news/AQkrJ_mvnRmClZjz_HJzA9w

Not sure what your angle is here, but is seems to be to silence me or prevent me asking a question. Regardless of where a government process is in terms of consultation, research, bills to parliament, I have a right to ask the question to my fellow mums ‘do you think we should increase taxes to pay for social care?’

This.

There are loads of other ways of funding it that should be explored first, eg dividend tax, corporation tax, capital gains tax and probably loads more that I've never even heard of.

I know of a director (not the CEO) of a group of care homes who earns £900k++. This was back in 2020.
Social care should be not for profit.
Currently if you are not a self funded, the bar is very high to get local authority to finance your place in a care home. So if you rent and have little savings or your spouse is still living at home with you, you will have a battle to get funding for a CH because you can't pay for it yourself.
Continuing Health Care is almost impossible to get.

We are pretty much the only European country with ‘free at the point of delivery’ healthcare. Most places have a government/insurance hybrid for medical and social care. We have to accept that the nhs/social care funding model no longer works. However selling it to voters will be very hardand if accepted the transition period will be horrendous I imagine.

No I meant an insurance against having to sell a home. A bit like car insurance - only those with cars pay it, but it means in the case of a serious accident, there is a cap to the individual in terms of costs. So, for this product, it would only apply to those who have assets and extra income.

But what would the benefit be to any insurer of offering that kind of cover?

Ah so everyone else should pay for it? This is the problem, you want better services as long as someone else has to pay. Either we accept lower levels of public services and encourage those who can afford it to buy private alternatives OR we all have to pay more income tax. Just going after other people doesn't work because then they get sick of being constantly targeted.

Similar to car insurance industry.

@Toodaloo1567
Your idea of purchasing insurance against having to sell your home will only potentially be of benefit to homeowners, not those renting or still living with their spouse.
How would you help those relying of local authority funding? They are the ones suffering at the moment.
What about patients stuck hospitals because they are no social care beds available?
You are not looking at the whole picture.

Genuinely I think if you have assets you should pay for your own care. It also makes much more sense to downsize into sheltered accommodation and have care on tap paid from sale of house than trying to cling on to the family home. I do also think that we possibly over medicate the elderly. My Aunt died recently she was given six months to live about five years ago. Honestly it’s been brutal crisis to crisis. Wanted to stay at home her daughter ended up doing bulk of caring, carers 4* daily but hardly anything can be achieved in those 15 minutes. She is a shell of herself. Actually said she felt unable to grieve as just felt relief.

If you do not have assets, you do not pay.
If your home is shared, then the home is disregarded.
Not sure how those in receipt of LA funding are suffering?
The question wasn’t about how to increase capacity in hospitals or social care beds.

The social contract - the one that the Conservatives began ripping up when Cameron announced "austerity" and that Johnson, Hunt, May and Sunak put through the shredder to finally kill it off - was supposed to be the "insurance product" for people who became sick or when they reached old age. The deductions were even snappily called "National Insurance" in order to convince people that it was something worth paying.

As for an "insurance product" that people should purchase on retirement - how do you envisage this working? Who would provide this "insurance" and on what basis? Would people pay according to their current health? What about people who cannot afford the premiums - there being a clear link between poverty and poor healthcare and shorter life expectency? What about people who the insurance providers refused to cover? No commercial insurer would enter in to this type of scheme unless there was the potential for huge profits, meaning that the only alternative would be a government-run scheme ... which is what the UK already has (but which nobody wants to fund because they all believe that old age and infirmity are things that only affect "somebody else").

Except that most people end up needing care/care home etc help later in life than need to claim for a car, and the cost of ongoing care fees would far surpass the cost of paying out for a car.

As an example my granda had Alzheimers and required care in his home & then in a care home for nearly 11 years before he died. At a cost of nearly £1500 a week, so nearly £75k a year.

No insurance company is going to take that gamble for the same reason that it’s very difficult to get life insurance past a certain age, and if you can find it then it is ££££.

I also have no issue with homes being sold to pay for care, it's odd that we expect to be able to pass on houses to our kids, while people who can't afford to own a home fund care for those that do.

My entire point is that we need to raise enough money for what we need. Not another half job, sort it properly, and we're all going to have to pay for that. We will likely all need the NHS and the care service so let's get it sorted.

People who would not be able to afford premiums, or are in poverty, would receive their care for free anyway.

I think people are confusing the concept of an insurance product. What I propose would be similar to car, house, life insurance.

How do we get a balance between being able to adequately prepare and fund our own old age while paying enough taxes to support those who can't?

We're of an age where we're fretting over our own retirement plans and beyond. These past 4 years have been our most expensive to date with a child at uni and two in college. We pay into pensions which are unlikely to be enough but are not able to save beyond that.

My grandparents were not wealthy but managed to self fund their care through their pension and their property. I'm not sure we'll be able to do the same, although that would be our hope.

This whole issue- and the NHS - needs to be taken out of the political arena and given to a string, competent cross party working group with a commitment by all parties that they will agree to a 30 year plan. It is too complex to be kicked around in the way it currently is.

As soon as any proposals are made by any party, before they can even be fully costed and the details worked through, they are taken to pieces and turned into headline click bait . "Death tax", "x party wants to take your home".... it makes it impossible for any sort of sensible discussion around sustainable proposals.

There used to be insurance available for the costs of long-term care.

It stopped when it became commercially unviable.

If insurers thought it was a good idea, I don’t think there’s anything stopping them bringing it back.

I think if we as a society are asked to pay more towards social care it needs to be everyone with an income, not just something put on NI.

I feel no more inclined to pay for my social care than my healthcare. Because quite honestly they are the same thing though we pretend they are not. I am actually not adverse to paying for both through insurance, or otherwise, but can see no moral justification for paying for one not the other. If we justify paying for social care privately (and we are well on the way to that) we will blindly stumble into paying for health care. Because there is no difference.

I agree - income tax would be fairer and spreading over a larger number would mean less impact per person. I would also reduce the tax loopholes and exemptions.

I just had a look at the stats. Around a fifth of elderly need residential care at the end of their life and the average length of their stay is 2 years. Let’s say that’s a typical cost to the elderly person (who goes into residential care) of £150k.

Example calculation for insurance:

5 people, 1 of which (statistically speaking, 20%) will need residential care. £150k spread over 5 people is £30k. Let’s add a bung for the insurance company of 5k. Would I pay £35k out of my retirement lump sum for an insurance product to avoid the prospect of having to sell my home for care? Hell yes.

Exactly. A tax in all but name that only really applies to workers is a terrible idea.

@Toodaloo1567 "People who would not be able to afford premiums, or are in poverty, would receive their care for free anyway."

Which is the system the UK already has - except nobody recieves healthcare or social care "for free" because almost everyone has paid into the taxation pot at some point in their life through income tax, National Insurance, VAT etc.

"I think people are confusing the concept of an insurance product. What I propose would be similar to car, house, life insurance."

Anyone who believes that a lifetime heathcare/care insurance would ever be provided by any insurance company, and who compares this type of insurance with car insurance, clearly has no concept whatsoever about how commercial insurance works. The only possibility is a national scheme, funded by all of the population - which is what every developed country in the world has in one form or another (with the possible exception of the USA).

How will that be funded? It’s going to be pretty expensive so most people will be unable to afford it. Bringing us back to the original problem. A lot of people are also against homes being sold because they won’t get their inheritance.

The money has to come from somewhere.

Might add that I’ve no objection to people’s houses being sold to pay for care. In this family there have been 2 who were entirely self funded in their care homes - both suffering from dementia that eventually needed 24/7 care.