June 6, 2011

UK: Who pays for the elderly?

LONDON, England / The Daily Mail / Money / June 6, 2011

MONDAY VIEW
by Ros Altmann

After recent frightening headlines from the UK Care sector, will we finally wake up to the scale of the challenge we face to ensure dignity and decent care for our ageing population?

It is wonderful that so many are living longer, but Government has failed to prepare for the inevitable sharp increase in costs of older people’s care. Everyone is in denial. ‘I don’t want to think about it’. ‘It won’t happen to me’. ‘The State will pay’. ‘It’s all too difficult’.

All kinds of excuses, but in reality nearly all of us are likely to have to engage with care funding, for ourselves, a partner or a parent.

Growing problem: By 2030 those needing care will have risen by 50 per cent

A few years ago, warnings of a looming pensions crisis were brushed aside but policy is now desperately seeking solutions for the pension problems we have all woken up to.

Let’s not make the same mistakes with care.

Those in need cannot wait at all. Yet no money has been set aside, there is next to no financial sector or employer involvement and state provision is patchy at best.

The coming decades will witness a sharp rise in demand for care in ‘the’ home or care in ‘a’ home. One in three women and one in five men will need some care, normally costing tens of thousands of pounds. It is vital that our system of regulation and protection for vulnerable elderly people is improved.

But funding of care must also be provided. By 2030 numbers needing care will rise by 50 per cent and the working age population will be unable to afford the costs. However, in a civilised society, the money has to be found. There are no easy answers.

The current system is complex and confusing. Local government is responsible for a large proportion of social care funding, provided on the basis of need and ability to pay. With local authority budget cutbacks, care services are increasingly concentrated only on those with greatest needs.

Removing early intervention means many elderly patients end up in NHS hospital acute beds costing a fortune.

The State only covers medical care in full, whereas non-medical long-term care is means-tested. Anyone with over £23,250 in assets in England and Wales may have to cover their entire care costs. As it is virtually impossible to insure against such unlimited costs, people don’t.

So what can be done? Apart from better regulation and protection for care home residents, we must also reform care funding.

The Dilnot Commission, reporting in July, will propose options for reform – its recommendations must be taken seriously, rather than pushed into the long grass as with previous Reports.

Reforms could include capping the amount people must pay – say £50,000 – with the state funding the rest. Incentivising care savings plans, perhaps Care ISAs, or even ‘family care plans’ where families club together, with the benefit of tax relief, to pay for someone’s care.

Some will need to use the value of their house, but not all of it as now. This should attract private sector involvement to help plan properly.

Reforms are essential to ensure our ageing population can achieve the dignity and care so many will need in future years. We missed the pensions crisis, let’s not fail on care funding too.

Ros Altmann is the Director General of Saga

Copyright: Associated Newspapers Ltd