We all have different visions of retirement. Mine involves a hammock, an intravenous Pimm’s drip and the complete works of Trollope. Yours may embrace Saga cruises, extreme sports, gardening or just the simple pleasure of telling your boss where to stick his job.
Rarely do we let reality creep in. A long, slow slide towards the grave, funded by an inadequate pension, punctuated by illness, until at last we are deposited in a home with beige walls and a chirpy, misleading name. If you are very, very lucky, the Elysian Fields Retirement Home will be a genial, clean place.
Click here for source of photo
It is a prospect few can bear to contemplate. We spend our adult lives striving to be self-sufficient, strong, immune from fate. Yet with dotage comes vulnerability, a tangible diminishing of dignity.
We are terrified of old age, but we will have to live with it for longer. In 1925 a man who made it to 65 could expect to live a further 12 years. By the early 1990s a man who made it to 65 could expect another 14.2 years. Now it is an extra 17.4. The numbers are rising fast. Women’s life expectancy at 65 has risen from 17.9 to 20 years since the 1990s. Two in three women and one in two men will need some form of care during their retirement.
Care is expensive and demeaning. Small wonder that Gordon Brown thinks we’ll all vote for him if he can magically make it better. A shame then, that the announcement of free personal care at home in the Queen’s Speech was flawed, badly costed and transparently rushed. It contradicted a recently published Green Paper, and carried the whiff of desperation.
There is, however, some excuse for Mr Brown’s failure to tackle the problem of paying for long-term care. There is a big, ancient, whiskered, incontinent elephant in the room. We cannot afford to look after our growing army of the elderly. Our ambition for a caring, inclusive welfare system is not matched by our tax receipts. By 2050 the number of 80-year-olds is forecast to double. As a nation we are broke and ageing, a toxic combination.
A 65-year-old can expect to pay an average of £30,000 for care before death. About 20 per cent of pensioners will need care costing less than £1,000, but 20 per cent will pay more than £50,000. A stay in a residential home with nursing care costs an average of £35,000 a year. It’s £6,049 a year cheaper to send Junior to Eton than Granny to Elysian Fields.
So, who pays? At present, the answer is a confusing mishmash of state benefits and local authorities. Distinctions are drawn between nursing care and residential care. This allows local authorities the wiggle room to create their own rules, and results in a postcode lottery. If you have to go into a care home, and your capital exceeds £23,000, you pay for the care yourself. If your home is empty, it can be included as part of our savings. The system is complex and loathed.
A different question is one that politicians run scared of. Who should pay? Most of us think the answer is easy: the State. I pays my taxes, I takes my dues. A survey by Saga found that 58 per cent of the over-50s believe the State should pay. People rage at the notion that their house is up for grabs in the present system. A working life is spent paying off the mortgage, and when the deeds finally arrive, they are held in trust for Elysian Fields Inc. Your beautiful house will be forcibly sold so you can sit staring at the wall, waiting for death.
The private sector has tried, and largely failed, to address the problem. Long-term care insurance (LTCI), which allows customers to insure against the cost of care by paying a lump sum or regular premiums, remains a tiny market. In 2008 there were only 15,277 regular premium policies in force. The problem is that LTCI is prohibitively expensive. The liabilities are large. Potential customers do not consider buying it until they suspect that they will need it; this shrinks the risk pool. Insurance is only cheap when the premiums of the many subsidise the big claims of the few.
Such problems will also hamper any plans for a partnership between the State and insurers. Both Labour and the Tories are looking at voluntary insurance schemes. In the Government’s Green Paper, the cost of a scheme was given as £20,000. Under the Tory scheme, £8,000 paid at retirement would guarantee the costs of care.
Leaving aside the experts’ doubts over these figures, it is useless to rely on a voluntary system, and a compulsory scheme would be electoral suicide. At 65, most of us are hale, hearty and completely in denial. Dream retirement cruise to Hawaii or insurance against care costs? Aloha!
We don’t want to pay; the State can’t pay — not if we want such fripperies as schools and hospitals as well. It is time that we all accepted the bleak facts. What is the point in accumulating capital, in the shape of a house or a fat bank balance, if not to protect ourselves in old age? Surely, the entire reason for wealth accumulation is to store fat in the fat times to pay out in the lean. Yet we persist in a belief that only our children should be able to prise our house keys out of our dead, cold hands.
We have developed a perverse, visceral relationship with our homes. Stamp duty and inheritance tax are akin to physical assaults. The baby-boomer generation bought all the houses when they were cheap, and guard them like terriers, determined to pass them on to the next generation. Their determination is understandable. The gap between the equity rich and the renters is wide and growing. Once on the wrong side of the divide, it is difficult to return. We want our children to be on the right side.
But the boomers are rapidly ageing. Either they accept that their houses should be sold to pay for their care, or they bequeath a monstrous tax burden. Either way, their children will pay. [rc]
Copyright 2009 Times Newspapers Ltd.
November 20, 2009
UK: Care in old age: we won’t pay, the State can’t
.
LONDON, England / The Times / November 20, 2009
Eton is cheaper than the average nursing home. To pay the fees either we sell the house or bequeath our children the bill
By Antonia Senior
We all have different visions of retirement. Mine involves a hammock, an intravenous Pimm’s drip and the complete works of Trollope. Yours may embrace Saga cruises, extreme sports, gardening or just the simple pleasure of telling your boss where to stick his job.
Rarely do we let reality creep in. A long, slow slide towards the grave, funded by an inadequate pension, punctuated by illness, until at last we are deposited in a home with beige walls and a chirpy, misleading name. If you are very, very lucky, the Elysian Fields Retirement Home will be a genial, clean place.
Click here for source of photo
It is a prospect few can bear to contemplate. We spend our adult lives striving to be self-sufficient, strong, immune from fate. Yet with dotage comes vulnerability, a tangible diminishing of dignity.
We are terrified of old age, but we will have to live with it for longer. In 1925 a man who made it to 65 could expect to live a further 12 years. By the early 1990s a man who made it to 65 could expect another 14.2 years. Now it is an extra 17.4. The numbers are rising fast. Women’s life expectancy at 65 has risen from 17.9 to 20 years since the 1990s. Two in three women and one in two men will need some form of care during their retirement.
Care is expensive and demeaning. Small wonder that Gordon Brown thinks we’ll all vote for him if he can magically make it better. A shame then, that the announcement of free personal care at home in the Queen’s Speech was flawed, badly costed and transparently rushed. It contradicted a recently published Green Paper, and carried the whiff of desperation.
There is, however, some excuse for Mr Brown’s failure to tackle the problem of paying for long-term care. There is a big, ancient, whiskered, incontinent elephant in the room. We cannot afford to look after our growing army of the elderly. Our ambition for a caring, inclusive welfare system is not matched by our tax receipts. By 2050 the number of 80-year-olds is forecast to double. As a nation we are broke and ageing, a toxic combination.
A 65-year-old can expect to pay an average of £30,000 for care before death. About 20 per cent of pensioners will need care costing less than £1,000, but 20 per cent will pay more than £50,000. A stay in a residential home with nursing care costs an average of £35,000 a year. It’s £6,049 a year cheaper to send Junior to Eton than Granny to Elysian Fields.
So, who pays? At present, the answer is a confusing mishmash of state benefits and local authorities. Distinctions are drawn between nursing care and residential care. This allows local authorities the wiggle room to create their own rules, and results in a postcode lottery. If you have to go into a care home, and your capital exceeds £23,000, you pay for the care yourself. If your home is empty, it can be included as part of our savings. The system is complex and loathed.
A different question is one that politicians run scared of. Who should pay? Most of us think the answer is easy: the State. I pays my taxes, I takes my dues. A survey by Saga found that 58 per cent of the over-50s believe the State should pay. People rage at the notion that their house is up for grabs in the present system. A working life is spent paying off the mortgage, and when the deeds finally arrive, they are held in trust for Elysian Fields Inc. Your beautiful house will be forcibly sold so you can sit staring at the wall, waiting for death.
The private sector has tried, and largely failed, to address the problem. Long-term care insurance (LTCI), which allows customers to insure against the cost of care by paying a lump sum or regular premiums, remains a tiny market. In 2008 there were only 15,277 regular premium policies in force. The problem is that LTCI is prohibitively expensive. The liabilities are large. Potential customers do not consider buying it until they suspect that they will need it; this shrinks the risk pool. Insurance is only cheap when the premiums of the many subsidise the big claims of the few.
Such problems will also hamper any plans for a partnership between the State and insurers. Both Labour and the Tories are looking at voluntary insurance schemes. In the Government’s Green Paper, the cost of a scheme was given as £20,000. Under the Tory scheme, £8,000 paid at retirement would guarantee the costs of care.
Leaving aside the experts’ doubts over these figures, it is useless to rely on a voluntary system, and a compulsory scheme would be electoral suicide. At 65, most of us are hale, hearty and completely in denial. Dream retirement cruise to Hawaii or insurance against care costs? Aloha!
We don’t want to pay; the State can’t pay — not if we want such fripperies as schools and hospitals as well. It is time that we all accepted the bleak facts. What is the point in accumulating capital, in the shape of a house or a fat bank balance, if not to protect ourselves in old age? Surely, the entire reason for wealth accumulation is to store fat in the fat times to pay out in the lean. Yet we persist in a belief that only our children should be able to prise our house keys out of our dead, cold hands.
We have developed a perverse, visceral relationship with our homes. Stamp duty and inheritance tax are akin to physical assaults. The baby-boomer generation bought all the houses when they were cheap, and guard them like terriers, determined to pass them on to the next generation. Their determination is understandable. The gap between the equity rich and the renters is wide and growing. Once on the wrong side of the divide, it is difficult to return. We want our children to be on the right side.
But the boomers are rapidly ageing. Either they accept that their houses should be sold to pay for their care, or they bequeath a monstrous tax burden. Either way, their children will pay. [rc]
Copyright 2009 Times Newspapers Ltd.
We all have different visions of retirement. Mine involves a hammock, an intravenous Pimm’s drip and the complete works of Trollope. Yours may embrace Saga cruises, extreme sports, gardening or just the simple pleasure of telling your boss where to stick his job.
Rarely do we let reality creep in. A long, slow slide towards the grave, funded by an inadequate pension, punctuated by illness, until at last we are deposited in a home with beige walls and a chirpy, misleading name. If you are very, very lucky, the Elysian Fields Retirement Home will be a genial, clean place.
Click here for source of photo
It is a prospect few can bear to contemplate. We spend our adult lives striving to be self-sufficient, strong, immune from fate. Yet with dotage comes vulnerability, a tangible diminishing of dignity.
We are terrified of old age, but we will have to live with it for longer. In 1925 a man who made it to 65 could expect to live a further 12 years. By the early 1990s a man who made it to 65 could expect another 14.2 years. Now it is an extra 17.4. The numbers are rising fast. Women’s life expectancy at 65 has risen from 17.9 to 20 years since the 1990s. Two in three women and one in two men will need some form of care during their retirement.
Care is expensive and demeaning. Small wonder that Gordon Brown thinks we’ll all vote for him if he can magically make it better. A shame then, that the announcement of free personal care at home in the Queen’s Speech was flawed, badly costed and transparently rushed. It contradicted a recently published Green Paper, and carried the whiff of desperation.
There is, however, some excuse for Mr Brown’s failure to tackle the problem of paying for long-term care. There is a big, ancient, whiskered, incontinent elephant in the room. We cannot afford to look after our growing army of the elderly. Our ambition for a caring, inclusive welfare system is not matched by our tax receipts. By 2050 the number of 80-year-olds is forecast to double. As a nation we are broke and ageing, a toxic combination.
A 65-year-old can expect to pay an average of £30,000 for care before death. About 20 per cent of pensioners will need care costing less than £1,000, but 20 per cent will pay more than £50,000. A stay in a residential home with nursing care costs an average of £35,000 a year. It’s £6,049 a year cheaper to send Junior to Eton than Granny to Elysian Fields.
So, who pays? At present, the answer is a confusing mishmash of state benefits and local authorities. Distinctions are drawn between nursing care and residential care. This allows local authorities the wiggle room to create their own rules, and results in a postcode lottery. If you have to go into a care home, and your capital exceeds £23,000, you pay for the care yourself. If your home is empty, it can be included as part of our savings. The system is complex and loathed.
A different question is one that politicians run scared of. Who should pay? Most of us think the answer is easy: the State. I pays my taxes, I takes my dues. A survey by Saga found that 58 per cent of the over-50s believe the State should pay. People rage at the notion that their house is up for grabs in the present system. A working life is spent paying off the mortgage, and when the deeds finally arrive, they are held in trust for Elysian Fields Inc. Your beautiful house will be forcibly sold so you can sit staring at the wall, waiting for death.
The private sector has tried, and largely failed, to address the problem. Long-term care insurance (LTCI), which allows customers to insure against the cost of care by paying a lump sum or regular premiums, remains a tiny market. In 2008 there were only 15,277 regular premium policies in force. The problem is that LTCI is prohibitively expensive. The liabilities are large. Potential customers do not consider buying it until they suspect that they will need it; this shrinks the risk pool. Insurance is only cheap when the premiums of the many subsidise the big claims of the few.
Such problems will also hamper any plans for a partnership between the State and insurers. Both Labour and the Tories are looking at voluntary insurance schemes. In the Government’s Green Paper, the cost of a scheme was given as £20,000. Under the Tory scheme, £8,000 paid at retirement would guarantee the costs of care.
Leaving aside the experts’ doubts over these figures, it is useless to rely on a voluntary system, and a compulsory scheme would be electoral suicide. At 65, most of us are hale, hearty and completely in denial. Dream retirement cruise to Hawaii or insurance against care costs? Aloha!
We don’t want to pay; the State can’t pay — not if we want such fripperies as schools and hospitals as well. It is time that we all accepted the bleak facts. What is the point in accumulating capital, in the shape of a house or a fat bank balance, if not to protect ourselves in old age? Surely, the entire reason for wealth accumulation is to store fat in the fat times to pay out in the lean. Yet we persist in a belief that only our children should be able to prise our house keys out of our dead, cold hands.
We have developed a perverse, visceral relationship with our homes. Stamp duty and inheritance tax are akin to physical assaults. The baby-boomer generation bought all the houses when they were cheap, and guard them like terriers, determined to pass them on to the next generation. Their determination is understandable. The gap between the equity rich and the renters is wide and growing. Once on the wrong side of the divide, it is difficult to return. We want our children to be on the right side.
But the boomers are rapidly ageing. Either they accept that their houses should be sold to pay for their care, or they bequeath a monstrous tax burden. Either way, their children will pay. [rc]
Copyright 2009 Times Newspapers Ltd.
