Will You Look After Your Own?

Liz Emerson asks who will pay for the growing burden of an ageing population

The Organisation for Economic Co-operation and Development announced last week (18 May 2011) that the cost of caring for the elderly could treble by 2050. The body, which represents the most industrialised nations, estimates that 10% of people in OECD countries will be more than 80 years old by 2050, as longevity increases.

In the UK 50% of our annual NHS budget already goes on healthcare for the over-65s leaving front line services for the young, such as midwifery, stretched at the seams.

The scale of future costs is daunting. In 2009, according to the Treasury’s very own Long Term Public Finance Report, in the last twenty years alone there has been a 25% increase in the amount of time people live as permanently unwell at the end of their lives. This means that our already stretched health service will be increasingly stretched.

Ros Altmann, Director-General of Saga, sums up the problem of old age care in the UK: “savers aren’t saving for it, families aren’t planning for it, local authorities have next to no budget for it.”

With government calling for even tighter cost savings and reductions in council service provision, where is the money to come from to care for the increasing elderly population that is living longer, but unwell?

Should we be paying for outside care at all? Perhaps we should be reverting back to extended family solutions and take care of our own in our own homes, as David Willetts suggests in his 2010 book, The Pinch.

Or should we be asking older generations to forgo their ‘rights’ to universal benefits (TV licences and free bus passes) so those budgets can be better spent on providing elderly care in the community and saving lives rather than watching lives?

It comes down to how we cut the cake, and the cake will be bigger or smaller depending on the income generated and taxation paid, by younger generations.

Our national psyche of obligation and respect for older generations can only continue if the younger and future generations can afford to give their money and time.

With increasing house prices, rent costs sky high, education no longer free, the scrapping of family tax credits and job tenure uncertain, younger generations are already so burdened by overt and hidden taxation that they have no spare cash to give to old-age care.

So perhaps we do need to ask the older generation (the 75% of whom do live on more than £5k a year) to put their hands in their own pockets and pay for their care.

Government can help too. Incentivise older people who pay for their own care, offer discounts on capital gains for those who down-size and release equity to pay for their care?

How do you think we can pay for care for the elderly in the UK?

Posted on: 24 May, 2011