By chance I pick this headline from the Aberdeen Evening Express: it is typical of many published on the last day or so:
Just over one in 10 adults over 55 have set aside money to cover the costs of any future care needs, the consumer rights group Which? has warned.
A survey commissioned by the organisation found only 12% were saving in case they needed to pay for care in later years.
Well of course they aren't. It's astonishing that any might be. Why? Just suppose the question had been changed to 'Are you saving for your future cancer needs?' and see what the answer would have been. The questions aren't dissimilar after all: both might well be about end-of-life provision.
First, people would say they don't think they will get cancer. And on balance of probabilities they are right.
Then they might say that they think the state should supply in this situation, and again, they are on balance of probabilities right: a lot of people still do have their care paid for by the state, albeit it is not the best available. Means testing does exist for care and some are confident that they will qualify.
Third, they will simply say they have other priorities. For many that will still be providing for a parent in care or providing for children. Their own long term is just too distant to worry about now.
Fourth, they will be saving for a pension instead, and why not?
Fifth, they accept that eventually the sale of a home will have to provide if they need care. The idea that we are all obsessed with passing on the family home to be split between next generations who won't want it is a Daily Express myth.
So, of course, people aren't saving for care. It's irrational and impractical to do so. In which case the idea that it should be encouraged by tax exemptions is just another way to provide tax breaks for those already well off.
There is a case for simplifying the tax system. Complicating it in socially absurd ways, as any such scheme would be, makes no sense at all. This is an idea that should have been scrapped before ever reaching the pages of a press release.
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But it does distract from other things…
Worth pointing out that you have to be incredibly rich to be in any danger of paying inheritance tax at all.
Of course nobody saves for care, unless they are so rich that they habitually pay for private health care and private schools anyway. You might as well throw the money away. Social care is so expensive that after a few weeks or months all the thousands you saved up will be gone, and you are looking at the trauma of being pushed out of your new home into the home you were trying to avoid in the first place.
Even paying privately you will be taken advantage of, looked after by a stressed and understaffed workforce where even the supervisors are only getting minimum wage, and then you get pitched into a system that is in crisis.
We need a National care service like the NHS, and to radically re-order the distribution of society’s resources to look after older people.
Agreed
And we could fund it if we were willing to tax wealth
I agree with everything you say, except that the current inheritance tax threshold of £325,000 would apply to large numbers of London householders. It applies to me, even though I live in a modest suburban flat which has dropped significantly in value in the last year – not that I’m complaining.
“Fourth, they will be saving for a pension instead, and why not?”, except they can’t afford that either. Pensions, tax incentives… We all know this is unsustainable. How on earth are the majority of people going to be able to survive in old age? Scratches head…
State provision of course
The intergenerational contract will have to come into play
And houses will have to be taxed to pay for it
I think you know I was being sarcastic;o)
As people get older it is often the case that they have children and grand children who are a call on their resources. So do you shell out for family or put it in the savings for the State to take?
You know the answer to that
How much do you have to earn to be able to afford to save for anything, let alone paying for someone to look after you in your dotage? A lot (most?) just don’t have enough money to save, full stop.
Precisely
how much saving (of any sort) would you anticipate if all of the tax reforms you set out in a previous post were adopted?
Significant
I have not done the modelling
But tax is not just abiutbrevenue raising
You should take note of that fact
Slightly off topic, I know but it would be good if you could do a post on this, Richard. It’s a blogpost by Mark Frankland: a writer who runs a charity in Dumfries distributing 5000 emergency food parcels a year. Mark says his charities accounts for the last year are pointing to a real terms inflation rate on basic food items of up to 80%:
http://marksimonfrankland.blogspot.com/2018/08/a-quiet-food-crisis-is-gathering-pace.html
Thanks Ken
Read and tweeted
I thought that what set us apart from other animals on the planet was that we looked after each other better – especially the young and old – instead of seeing them as a potential meal or an encumbrance like other animals do.
I’m tired of the way older people are depicted (as a drain on society). It really must stop. No wonder some elderly are hostile to new ideas.
“The idea that we are all obsessed with passing on the family home to be split between next generations who won’t want it……”
Where do you get that piece of logic from?
I would certainly “want it “if any such “bauble” were to be on offer!!
I live in the real world
Slightly off topic, but the balance of probabilities is no longer in favour of not getting cancer, since one in every two of us will.