In a country where savings don’t seem to matter….

[Unap100]

Do you really blame anyone for squandering their retirement fund and expecting the government to pick up the tab?

I’ve been an avid saver. I am not hugely wealthy but through my savings I’ve recently paid my house off of 450k and I’m 39. I have 34k in the bank.

But to what end?

YES of course there are benefits personally and NO I don’t want to be on the bones of my arse with no choices in life.

But seriously… I’ve worked in care homes etc and why the hell should one person have that funded and the next person have worked all their life to fund it? You might get a slightly nicer care home for a bit but they’re all underfunded and barely satisfactory anyway.

Genuinely, where’s the fairness in that? Where’s the incentive to work? It then either goes to a care home or taxed away.

I never thought I’d say this but spending it all while you can doesn’t seem a bad idea. AIBU? What’s your view on this?!

What percentage of people end up in care homes OP?

I ask because only a small percentage of the total population ends up in long-term residential care, typically at a very old age.

Until then, it's very definitely worth having savings to make your retirement comfortable.

Where’s the incentive to work?
Don't most people work for a million different reasons, mostly to fund the life they are living? Surely very few work purely to pay the bill should they be one of the small percentage of people who end up in a care home.

I agree the system is utterly broken. There is way too little reward for people who work hard all their lives but in low to medium paid jobs. It contributes hugely to inequality as well, only a minority can break free from the trap and have a significantly more comfortable life. Two full time working people anywhere in the country should be able to afford a house, decent food and clothes, modest holidays and entertainment without any government help. And no, I certainly don’t blame people for gaming the system given that.

Why is this question only ever asked around funding in old age?

Should I not bother working or work less so I can get a council house?
Should I have loads more dc for extra money?
Should I claim for my disability?

Or

Why should I pay tax for your children’s education when I don’t have any?
Why should I pay tax for the NHS when I have private healthcare?
Why should I pay tax to fund pension credit whilst saving into a state pension?

What’s the alternative though? Have older people dying in the street or starving to death at home? You can say “well everyone should pay a bit more tax to fund their old age” and I don’t disagree, but the people you’re probably cheesed off with are unlikely to be paying tax anyway. The vast majority of people at that stage of life are old and not in great health and if they weren’t in a care home they’d be on a NHS ward.

I would personally be happy to buy some kind of insurance policy where I pay in now and then they pay out if I need to go into a home, but when we’ve not even got mandatory health insurance I think that’s a long way from being made compulsory.

If you can describe a better system I am genuinely interested.

Until then I think it’s really common sense- yes save a bit for your retirement but also enjoy yourself in the meantime with a few nice meals, holidays etc. If you can do both then you’re lucky really.

All of those questions get asked on here and in general very often.

There is way too little reward for people who work hard all their lives but in low to medium paid jobs.

What should the reward be though?

How can people expect a lifetime of free healthcare & social care, a state pension from the tax paid on the average salary & think they deserve more?

I am not hugely wealthy and I’ve recently paid my house off of 450k and I’m 39

You are comparatively pretty blooming wealthy.

It is worth having savings in retirement, not everyone ends up on a care home. However you should recognise that you are hugely privileged to have laid off a 450k house and have 34k in the bank at 39.

About 70% of people die "in the community" ie before their health deteriorates to the point of needing a care home. Of the people who do need a care home, about 20% die within a few weeks and over half die within 3 years. The number of people who end up losing a lifetime's accumulated assets to care home fees is actually very very low.

What I would like is a voluntary scheme that anyone who reaches the age of 70 with assets worth more than £500,000 can join, which is a mutual agreement to spread the risk. Everyone who joins gets a charge put on the deeds of their home which must be discharged when the owner dies. The actual amount charged to each member of the scheme is the average cost of care home fees paid by all members of the scheme who have died within the last 12 months, less the amount that they personally have had to pay. As the vast majority, statistically, will have had to pay zero, the amount each person's assets get charged will be relatively modest, and anyone who did have to fork out significantly will get a refund to be added to their estate.

@AnneLovesGilbert I don’t see threads about the points I listed often but I see threads weekly about how to avoid care home fees, protecting dcs inheritance, not saving for retirement etc.

@CandyEnclosingInvisible I think something like your suggestion is a good idea. I would include care in the home though as the vast majority have a version of this. Yes savings are means tested but not house value which I think is wrong.

We have an ageing population, people are going to have pay more for their health & social care.

But do you really think the sole purpose of savings is to pay care home fees?

DH and I have always saved in pension schemes and so on since our 20s. As a result we were able to retire early in 2021 when he was 63 and I was 59.
Since then we have done loads of things and had some great holidays. In fact we are currently in China on the trip of a lifetime. Most of the big holidays have been funded from our retirement money. Of course I think it's worth it.

The rewards and benefits of having any stable work and building skills over one's working life are clear

Purpose and motivation throughout life
personal pride in getting one's arse out of bed and showing up for work
health benefits
building more than just the bare minimum savings and pension.

Even if it's a minimum wage job, I see people every day, all over the place, working, being productive and doing a good job of whatever life throws their way - retail, financial services, energy, government, healthcare, the list goes on,

I don't think those people who slog away day after day would be that pleased to be written off as a grifter because the alternative cushy number is to have their care costs paid for or benefits because they can't be arsed to work.

your perspective is narrow-minded and quite frankly tone-deaf.

You currently have to pay NI for 35 years to be entitled to state pension. I have paid in for 50 years. Would it not be fair for people who have paid in for longer to get incremental increases in their pension.

I also think that state pension should not be taxable. I have a small private pension which puts me into paying tax. Meanwhile my SIL - who has never worked - gets pension credits and all of the additional benefits attached to it. She is better off than me.

My mum, who had dementia, had to pay for her care as she had savings. My BIL got the same for free.

I worked briefly in a council run care job. The people who had money paid more to compensation for those who got it for free. So unfair.

It does make you feel like a mug if you have saved all of your life.

I see elderly people struggling in their own home because they don't want to pay for care/ or will struggle financially once they pay for it.

While others get the same care for free.

The system is broken.

I work and save because then we can pay off our mortgage and have lovely holidays and pay for our DCs to have extra help with school work and do fun things like swimming, Scout camp, music lessons, a climbing wall in their playroom, our lovely house.
Surely the point of earning and saving money is to have a nice life now and help your DCs to have a nice life?

This is the problem.

Unless you've saved huge amounts with huge pensions.

Most people are working just to get to the same level as financial security as those who have never worked at all.

You currently have to pay NI for 35 years to be entitled to state pension. I have paid in for 50 years. Would it not be fair for people who have paid in for longer to get incremental increases in their pension.

50 years will be common for many under a certain age.
I think it should be linked to what you pay in &/or means tested like in other countries but some would be outraged.

Only 10% of the population end up in a care home. If you are in the 90% you will be living in your own, comfortable, familiar home.

Your savings will buy home comforts, better food, holidays, taxis and outings, personal care if you want it. That's what I'm aiming for anyway.

I see elderly people struggling in their own home because they don't want to pay for care/ or will struggle financially once they pay for it.
While others get the same care for free

But this is true of many benefits, either we have a safety net or we don’t.

Right?! Essentially 500k saved, not really allowing for interest on the mortgage. Say 15 years working, that's 33k after tax saved every year. That's a huge amount and definitely makes you wealthy in my books!

I think the safety net should be safe but far more basic. If you want to be housed by the taxpayer it will be in hostel style accommodation etc. you shouldn’t live in a similar accommodation to those that have worked all their lives. That’s not just.

Across your whole life, the reward for savings is choices.

Having financial security- whether it's equity in the house, or ISAs, or other savings, or a good pension - gives you choices down the if things get tough.

You lose your job? If you've paid off the house you're not at risk of losing the roof over your head. If you've got savings you can take longer to find the next job rather than jumping at the first thing that comes along.

Your kid is having a mental health crisis? You can get private help rather than having to wait years for NHS help.

You need dental work? You have more choices around speed and quality of treatment.

The roof is leaking or a major appliance breaks? You've got better options.

You can choose to live a more comfortable retirement with more choices of how to spend your time.

And if you're one of the minority who end up in a care home, you have the ability to choose where you end up, rather than just what the council is willing to fund.

That's the reward. And it's a pretty good one.

So would that be for anyone who receives housing benefit because we have a dysfunctional housing market that penalises the young.