Who cares? And how do we pay them?

carefree

Except Care isn’t free

News that the Government is mulling a new Care ISA – to be funded from retirement savings will be greeted with joy within the bubble and indifference from the vase majority of people who do not plan for the consequences of later life dependency.

NEW ISA.jpg

Long Term Care is not a savings issue, it is an insurance issue. I’m with Sarah Wollaston, the Tory MP who chairs the Commons health and social care select committee who said introducing a care Isa would be a “colossal mistake” that would only work for a small number of wealthy people.

“This won’t solve the care crisis at all. There is no pooling of risk.”


We all care.

We all have elderly relatives or friends. We see elderly people in the street struggling and our natural instinct is to try to help.

It is in our genes to help elderly people, probably because our genes recognise our later selves in those we are helping.

The business of looking after others is different from looking after ourselves. We look after ourselves by keeping fit, avoiding poor food and laying off the booze and fags.

We look after others by calling on them , phoning them, sending them pictures on Facebook. Many people give up their jobs to nurse their parents. Some go further and become professional carers and some go into business and run care homes. The business of looking after others is primarily funded by the taxpayer – through the NHS or direct payments to those who do the caring or run the care homes. This is social insurance.

We are now asked to consider – diverting a part of our retirement savings into an ISA pot that is tax-advantaged to the next of kin if care is needed, or tax-advantaged to the saver – if it is.

A tax advantaged retirement pot, providing further tax advantages to those who pay income tax in retirement and inheritance tax when they die.

I feel we are being sold the usual wall-paper, while the plaster crumbles behind.


The ISA – the last refuge of a lazy policy maker

Someone, probably Michael Johnson, has got it into the Treasury’s head that every social problem can be solved by the ISA family.

There’s an ISA for savings, for pensions and for housing and now we’re going to have one for Care.

Each ISA ticks the box of some failed management consultant in the Treasury , who can explain the policy to some Brexit obsessed minister in a three letter word.

Each Minister can unveil their solution to a future crisis with minimal impact of short-term revenues and with no accountability over outcomes.

The annihilation of the welfare state continues, with those who can save, doing so as a tax-arbitrage and those who can’t, excluded from the party.

Thankfully there are responsible politicians like Sarah Wollaston, who see beyond the cynical wall-paper job and continue to worry about the fabric of our society.

It is not much fun being elderly but it is a lot more fun if you have care and proper care to boot. Putting out the message that Care is earned from financial prudence has some overt merit. But it will result in over cautious spending of retirement savings which is counter productive

Much better are solutions that require taxes to be paid and tax-revenues to be invested into better care, better care homes and greater awareness of all our need to care for the elderly.


Rewarding those who care

At the top of my list – in terms of priorities – are those who care for others voluntarily, and get scant reward for doing so.

They are the people who deprive themselves of income, out of love, or respect or simply duty. They are not properly rewarded. Carer’s allowances are pitifully low. The Government proudly boasts we could receive £64.60 a week if you care for someone at least 35 hours a week. That’s less than £2 per hour, about a quarter of the living wage.

If we are to have a just and fair society – we should begin by rewarding those who do care, rather than rewarding those who have the money – with further tax-breaks.

We are fed up with vote-winning ISA policies that paper over the cracks. We have had a number of reports over the years (Dilnot being the most important). All have called for a proper recognition of the importance of care as something to be insured socially.

Let’s remember, the first brick that fell out of the wall when the Tory lead crumbled at the last election, was the social care brick. When the Government dispensed with a proper responsible policy to win votes, the public turned against the policy architects.

As a nation, we aren’t stupid. We can see through this Care-ISA nonsense.

We all care, but some care more than others, society should be rewarding the carers, not messing around with “Care-ISAs”.

About henry tapper

Founder of the Pension PlayPen, Director of First Actuarial, partner of Stella, father of Olly . I am the Pension Plowman
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6 Responses to Who cares? And how do we pay them?

  1. Brian G says:

    We live in a society where it has become the norm to aspire to wealth and fame. Well done Thatcher your plan worked. Trouble is it only worked to preserve the selfish few whilst millions of people foolishly think they too might become one of the few. If we choose to regard social care as charity and tax as an evil then this is hoe things end up. A society where the chief execs earn 400 times more than their employees is an unequal broken mess rather than a society. What we need is a wholesale change in attitude about what makes a good person. And then we might have a chance. This is not about politics or economics this is about people changing their values. People should care about the plight of others less fortunate than them otherwise we will end up with a society that is fractured beyond repair.

    Like

    • DC says:

      “What we need is a wholesale change in attitude about what makes a good person”.

      This is so utterly condescending (or naïve) it’s making me cringe inside out.

      Success and wealth are products of opportunities and risks taken by individuals. Not all opportunities and risks will have equal outcomes, and the selection process isn’t necessarily fair, but that is capitalism.

      Even in spite of the quasi-Keynesian version of capitalism that we operate under, those would seem to be the rules.

      The post-tax compensation from my employer is spent on goods and services for those I care about. I am taking the risk and doing the work, no-one else. The government is forcibly seizing a cut to pay for essential services (and many non-essential ones too), so I assume that the fraction that remains is for me to spend? Is it ok if I spend this on people I care about? And if I choose to save it rather than spend it, is it ok if people I care about receive it? Does this make me a bad person?

      For example, I don’t enjoy foreign holidays etc. because I am saving for retirement, but I wouldn’t deny others their opportunity to do so. But when retirement comes and they wonder where their money should be, should I feel compelled to give them some?

      Rather than encouraging people to make better decisions and choose an alternative path, the socialist agenda seems to be to blame it on the rich. Failing that, tax the emerging affluent. But what happens when you are already doing that and nothing has fundamentally changed? “Tax them more” – of course!

      Would you accept the reality that people from all cultures, from all of human history, have an inexorable interest in themselves and those closest to them as opposed to considering the plight of others foremost? That is part of the human condition.

      “This is not about politics or economics”

      It absolutely is.

      What you propose is a more equal outcome, presumably by taxation(?). If so, please note you can do your bit – HMRC will accept ad-hoc payments for those who want their money spent by people they have never met and probably don’t trust, on things that will probably not benefit them in a meaningful way.

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      • Brian G says:

        My comment was about peoples attitudes not political systems. I think you seem a really warm loving person. Lets hope your own family love you a lot.

        Liked by 1 person

  2. Margaret Snowdon says:

    Hear, hear.

    Like

  3. Adrian Boulding says:

    For care costs, we can split the population into three groups.

    Around 5% can afford to pay for their care out of their own savings. A Care ISA will help this group (who perhaps didn’t need help anyway) and might even expand this group a little.

    Around 20% could afford the insurance premiums for a commercial risk sharing system. But the premiums are high and few are willing to pay.

    Around 75% can’t afford either. When they need care they will pay something from their savings, pension and house sale until the money is gone and then the State pays.

    What we need is a National Care System, free at the point of need, as un-thinkable as the NHS was when Aneurin Bevan introduced it. He had to overcome opposition from both Conservatives and Labour and today we have a health service that’s the envy of the world!

    That was the subject of my presentation to last year’s ILC annual conference.

    Adrian

    Liked by 1 person

  4. John Mather says:

    It may be that we measure by the wrong yardstick, over the last 30 years our GDP has risen but the majority do not seem wealthier or more secure. It is distribution of wealth that has gone out of sync with needs.

    Borrowing to consume and abandoning manufacture, real productivity is at the root of the problem. Synical liberation of pensions to boost a failing economy and to boost tax receipts are definitely selling the family silver for short term political reasons

    When will we face the reality of a global market and stop the lunatics destroying the economy that we have left

    Liked by 1 person

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