Julian Knight: Planning for old age? Government
Equity-release proposals vague, insensitive and more expensive than existing council schemes
Sunday 15 July 2012
There are absolutely no votes in long-term care. And if you need proof just look at the government's lame proposals in response to the Dilnot Commission's report into how on earth we pay for the millions who are going to need care in old age.
The government's scheme, as outlined by Andrew Lansley, is not that dissimilar to the status quo. The value of assets you can still have before you can qualify for free care will rise but we don't know by how much and there will be a cap on charges but again we don't know where this will sit.
The big headline grabbing measure was being able to take out a loan to pay for care which will be repaid – presumably with interest – from your estate when you die. In most cases this will mean the charge will be laid against the family home which presumably will be sold and the local authority reimbursed.
What we are effectively talking about is an equity release scheme run by civil servants and shoved on people at their most vulnerable. Individual civil servants won't want to get involved and I can see a complete advice black hole.
It's difficult to think of a system more likely to ensure a rank bad deal. Councils are already running schemes like these but interest free. The government's proposals are more expense.
However disappointing the government's moves on long term care, at least it correctly focuses on the fact that we are going to have to use our housing wealth to fund our retirement and care costs in the future.
Bearing this in mind, one idea is to get the private sector more involved with the guarantee of independent financial advice and an independent solicitor. If someone in their 70s is concerned they will eventually need long-term care, they can arrange a contract with a provider to borrow against a portion of their home. The loan should be available in small chunks and interest will accrue only when the money is drawn upon. This way the individual is in control rather than a bureaucrat.
Children's Mutual has said it is looking to merge with Forester Life.
After more than 130 years the Mutual could soon be no more. Its recent story reminds me of Leeds United under chairman Peter Ridsdale, who 'lived the dream' by taking major risks to become one of Europe's biggest clubs. All seemed well for a while then came a financial crisis and the club fell through the leagues.
In the Children's Mutual's case, for Peter Ridsdale read David White, their departed chief executive. He bet the Mutual on the continuance of Gordon Brown's child trust funds (CTFs). Betting so much on a politician's scheme was never a good idea and this was proven when one of the first acts of the coalition was to ditch the CTF, destroying the Children's Mutual new revenue stream in an instant.
It looked possible the Mutual may have to be wound up but, although that has been avoided, its fall can be seen with the move to woo Forester.
Independent Partners: See how much you could save by switching credit cards. Compare now
The battle for control of Stieg Larsson's £30m legacy
Geoffrey Macnab does not like the comedian's big screen debut
Look beyond the usual shows for the best festive telly
Michelle Nijhuis' daughter insists (s)he is, and she learnt a valuable lesson on gender in books
newsFormer soldier taped 33 of the animals to the floor and then stamped on them one by one
- 1 Sun will 'flip upside down' within weeks, says Nasa
- 2 Christmas comes early: Justin Bieber is 'retiring from music'
- 3 Iain Duncan Smith leaves Commons food banks debate early
- 4 Cycle death inquest: Boyfriend hugs driver of 32 tonne tipper truck that killed his girlfriend
- 5 Burglar steals video tapes of child abuse, hands them into police
Exclusive: Young people ‘want UK to stay in Europe’: Four in 10 adults aged 18 to 24 are ‘firmly in favour’ of membership, poll shows
Tom Daley ‘is gay because his father died’ says UK evangelist
Iain Duncan Smith leaves Commons food banks debate early
Kiss and yell: Italian protester charged with sexual assault after kissing riot police officer
PM denies two child limit for benefits is part of Tory welfare policy
Anachronistic and iniquitous, grammar schools are a blot on the British education system
- < Previous
- Next >
iJobs Money & Business
£Negotiable: Citifocus: High calibre individual with institutional client serv...
£120000 - £150000 per annum: Cornwallis Elt : Programme Manager, Strategy Lead...
£55000 - £120000 per annum: Pro-Recruitment Group: The Financial Services Tran...
£600 - £700 per day: Harrington Starr: Client based in West London is looking ...
Day In a Page
A three-bedrrom flat with 2,733sq feet of living space, a beautiful private garden and 15 acres of communal grounds
A four-bedroom chalet bungalow with three bathrooms and a spacious garden, £525,000
A two-bedroom flat with an open plan kitchen and two balconies, close to Arsenal station
A six-bedroom farm house with separate, detached cottages and 371 acres of land
A two-bedroom cottage with parquet floors, chunky beams and an open fireplace
A Grade II-listed home with six bedrooms, secluded landscaped gardens and views across Hadley Green
A Grade II-listed mansion with two apartments and a cottage, near Gretna Green
A three-bedroom Grade II-listed mews house with vaulted ceilings and roof garden
A spacious Grade II-listed family home with annexe and equestrian facilities among four acres of land in Itchingfield
A four-bedroom home with exposed brick walls and open fires in the picturesque village of Northill
A Grade II-listed property with five bedrooms and unique tower, overlooking Hastings Old Town
A charming five-bedroom detached family home, set within half an acre in Kew
A two-bedroom maisonette set on the top two floors of a period building, close to Kentish Town Tube.
Take advantage of the extra space provided by former stables and outbuildings at this five-bedroom farmhouse.
This three-bedroom Victorian terrace is near to Queen’s Road Peckham station, Nunhead station.
A five-bedroom modern house with terrace, swimming pool, Zen treehouse and large carp pond
An unexpected gem with four bedrooms, remarkable vaulted reception and a galleried study area
A five-bedroom house in one of Lymington's most sought after tree lined avenues, moments from the marinas and sailing clubs
A grand early 19th century B&B close to the historic harbour, with four en suite bedrooms
A four-bedroom, 17th century home with walled gardens, a landscaped terrace, cellar and open fires
A six-bedroom house with five bathrooms and four reception rooms spread over 4,000sq ft of luxury living space
A stunning three double-bedroom apartment with two decked terraces in the exclusive gated community, Bromyard House
A 10-bedroom period, family home amid beautiful surroundings in the centre of the Wentworth Estate in Longcross village
A stylish three-bedroom apartment with two bathrooms and private landscaped garden, moments from Fitzroy Square
A Grade II-listed Elizabethan barn with landscaped gardens, exposed elm beams and four bedrooms, all with lovely views
A six-bedroom family home, dating back to 1280 with four reception rooms, barn, swimming pool and tennis courts in Harwell
A spacious two-bedroom flat, refurbished to a very high standard with private landscaped garden, close to Kentish Town station
An exceptional two-bedroom apartment with balcony and underground parking in the centre of Richmond
A one-bedroom, luxury, duplex apartment in the grand landmark building, Imperial Hall
Run a fabulous boutique shop, live above it in a one-bedroom flat and let a second one-bedroom flat that comes part and parcel
A Grade-II listed, thatched cottage in Hundleby village, with five bedrooms, a coach house and three and a half acres
A spacious two-bedroom flat in the heart of Hoxton Square with wooden floors and roof terrace
A five-bedroom family home with stunning pool and gym complex set among two acres of land
A six-bedroom period house with heated swimming pool and a separate two-bedroom annexe cottage in Townlake, £795,000
A spacious and contemporary two-bedroom flat arranged over three floors, with garden patio close to St George Square, £600,000
A one-bedroom flat in a beautiful Regency building opposite the beach in Kemp Town, £190,000
A two-bedroom flat with London skyline views close to Surrey Quays. £395,000.
A seven-storey tower with three bedrooms and a stunning roof terrace. Guide price: £850,000.
A 16-bedroom country pile with nine reception rooms, four self-contained flats and a 13th century Peel Tower. £850,000.
A classic six-bedroom Victorian Manse house 10 miles from Edinburgh. £495,000.