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.
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”.