Old age care will cost us one way or another

All this is going to cost a huge amount of money, as much as pounds 1bn extra a year, or 0.5p on income tax

ld age is unfashionable and seems so far off for many of us that it's hard to be interested in the problem of who should pay to care for the elderly. Old age often seems like another lifetime away. Even among older people, sales of long-term-care insurance policies have never taken off. We are living much longer, but have failed to adjust our finances to take account of those expensive extra years.

Successive governments have also dithered over the problem. A Royal Commission has been investigating the costs of long-term care, and it will report tomorrow. Its findings have already been extensively leaked, but the official report should ignite a better debate on how we want to pay for our biological success. The choice is between state payment for the care of our elderly people; or insurance and pay-as-you-go for those who can afford it, plus a state safety net for those who can't.

The Royal Commission is expected to recommend that the state should pay for long-term nursing care for everyone who needs it. This is separated from the costs of accommodation, food and non-nursing help. Anyone with more than pounds 40,000 of assets would be expected to meet their own "B&B" bills in residential and nursing homes.

The report will also call for extra support for families nursing elderly relatives at home. This will clarify what we are and are not entitled to under our free health service.

People often moan that the "cradle to grave" service we have come to expect from the NHS has been eroded. But the NHS is intended to deal with health of the population rather than its social services needs. It's not supposed to pay for non-medical help around the home, such as cleaning or cooking.

All this is going to cost the Government a huge amount of money. Reports have suggested an extra pounds 1bn per year, and that bill will just go on rising if, as expected, the improvements in longevity are maintained at current rates. It might mean an extra 0.5p on the basic rate of income tax. That doesn't seem too much to pay if it sets up a workable system to benefit the elderly now and in the future.

The Government does not have to accept these recommendations, but it does need to do something to help us out financially. We have to accept our own old age is going to cost us money, and probably our houses. There's no way round it: if you expect to retire at 55 or 60 and live for another 40 years you need to arrange a lot of income, but it almost certainly won't be enough. Long-term low interest rates mean a disastrously low retirement income for today's and future pensioners. Currently, pounds 100,000 saved in a pension generates about pounds 4,000 a year annuity income in retirement (rising at 5 per cent a year). The Government's pension reforms have not tackled this issue, so we could all face one big problem when we retire. If they get it wrong on long-term care too, we will all be in serious trouble.

n i.berwick@independent.co.uk

Suggested Topics
Start your day with The Independent, sign up for daily news emails
News
news
Arts and Entertainment
British author Helen Macdonald, pictured with Costa book of the year, 'H is for Hawk'
booksPanel hail Helen Macdonald's 'brilliantly written, muscular prose' in memoir of a grief-stricken daughter who became obsessed with training a goshawk
Sport
footballLive blog: Follow the action from the Capital One Cup semi-final
Life and Style
food + drink
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Web Developer - PHP

£16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...

Ashdown Group: Client Services Manager - Relationship Management - London

£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...

Recruitment Genius: Credit Controller / Customer Service

£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...

Guru Careers: In-House / Internal Recruiter

£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...

Day In a Page

Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Front National family feud? Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks

Front National family feud?

Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks
Woman who was sent to three Nazi death camps describes how she escaped the gas chamber

Auschwitz liberation 70th anniversary

Woman sent to three Nazi death camps describes surviving gas chamber
DSK, Dodo the Pimp, and the Carlton Hotel

The inside track on France's trial of the year

Dominique Strauss-Kahn, Dodo the Pimp, and the Carlton Hotel:
As provocative now as they ever were

Sarah Kane season

Why her plays are as provocative now as when they were written
Murder of Japanese hostage has grim echoes of a killing in Iraq 11 years ago

Murder of Japanese hostage has grim echoes of another killing

Japanese mood was against what was seen as irresponsible trips to a vicious war zone
Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore
'I'm gay, and plan to fight military homophobia'

'I'm gay, and plan to fight military homophobia'

Army general planning to come out
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy