baldysblog.co.uk

Just like pension reform, politicians will talk endlessly about what needs to be done about looking after an ageing population but the question is, do they have the courage to do anything about it because any solution will be a 40 year haul with complex and ever changing “transition arrangements”.

More than that, not only must any solution be bi-partisan politically today but also have the full support of the British electorate because over that period of time, it maybe that the political parties which exist today could not be around in their present form in the future so, only the electorate can guarantee that the programme is followed through.

Money Purchase & Insured Arrangements

I have argued on this site before about the need for the whole of the UK both the private and public sectors, to move towards a compulsory “money purchase” pensions saving scheme. More than this, I have indicated that it would represent a vast switch of resources from the Public to the Private sector because the only way to ‘kick-start it’ would be by diverting a large proportion of National Insurance Contributions directly to pension providers leaving the Government with far less to play with and a reduction in what the public can expect the State to provide.

The reason why this is relevant in looking at care for the elderly is that if we in the UK follow a variation of the what Chile did over 20 years ago with pension provision, unlike our present pension funds which are swapped for an annuity on retirement, the accumulated fund could be inherited in other words, there is liquidity in the system to pay for care rather than our current “sell-up and go into a nursing home” option.

I don’t want to pretend that I have all, some or indeed, any of the answers on either pension provision or long term care for the elderly, there are clearly very many technical issues both in terms of medical and financial outcomes which may arrive by then, 40 years is a very long timespan when looking forward, I certainly won’t be here then !

There are issues we cannot now comprehend which may well change the whole equation, it would be foolish to think that the Riders of the Apocalypse will not play a part but all that acknowledged, we need an agreed plan and way forward because if we don’t construct one, our children and generations as yet unborn, could end up where they do not want to be and confronting even more difficult choices like actually killing their own Grandparents. The problem is not that people are living longer, it is that they are living longer in a “dependent state”.

Cash Is Neutral

During the 1980′s, I was in the UK Life & Pensions business and during a bit of a recession was talking to a Fund Manager who gave me the following but interesting views upon his “reality”. “Because of the past “success” of the sales force, every month £ millions came in via monthly ‘contributions’ which have to be invested in the market, the ‘plan holders’ would expect a “return” recession or not.”

How much truer would that be if we upped the volume to include regular contributions from the whole of the UK workforce ? The sheer volume would mean that Fund Managers would be struggling at least initially, to find sufficient business opportunities to invest in but a “sunrise industry” would most certainly be looking after the elderly and permanently infirm.

Let us suppose over our working lives and however much we resented it at the time, we have ended up with a large cash fund from which we can draw an income and part of that income we chose to spend on “personal care for old people” whilst knowing that we have a substantial and on-going interest in the companies that provide that care… One of the key benefits of this concept would be to break the concept of wealth only being expressed through property, a portfolio of investments would be better because as they say; “Capital is only income deferred”, and having both would be no sin.

To “surrender” part of our income in exchange for “personal care” is a choice we could make freely and with dignity, to have to sell our “whole portfolio of capital investments” to do the same, seems like an imposition. Our present system of having to sell your house in order to release the capital to pay for being ‘looked after’ and in the process, dis-inheriting your own children, is psychologically, even worse.

Solving looking after the old and alone where either they have been abandoned by their family or, have none to call upon, is something that can best be dealt with by private enterprise working to a ‘profit motive’ rather than any Government. If we put outside of their (Parliament’s), hands, even the possibility of providing “care for the elderly” in 40 years time and in the interim, restrict severely their right to upset ‘transitional arrangements’ because of their own short term political goals, we might be on the way.

A Personal Perspective

Some 4 years ago I stopped what I was doing to move in and look after my Parents so that they had the option of living and dying in their own home, my circumstances were such that I could do this and apart from them being looked after, for them to feel they would be leaving their son their home, was psychologically very important to them.

People have said that “I am a good chap to give up my life…” and all that malarkey but to be honest, that isn’t true because I have never thought like that ever. To me I just changed my life to “live another one” which included looking after my aged Parents but also gave me time to think, take pictures and prepare myself for the next stage of my personal journey.

There are two issues that arise from my own experiences that might be worth sharing. Firstly I do not expect or indeed require, any of my children to look after me in the same way some years hence. For my immediate post war generation, many of whom grew up in extended families surrounded by numerous relatives, this kind of concept of “care” is more natural, it is not for my children who were bought up in a “nuclear family” of parents and siblings only. The way forward and into the future for the vast majority will be via paid for care.

However, where an individual takes on the roll, there should be more flexibility and encouragement for them to retrain and even to start earning modest amounts of money without effecting any benefits that they get. Even though I am 62, when my Mother dies and my caring role ends, my priority will be to get back to working because I don’t like being reliant on the State but for many, they need to be encouraged and given an incentive to let go of State Benefits and starting that transition whilst still in the role, must make sense. A similar perspective could also apply to single mums, might be worth a thought.

Carers Allowance

For the first year after moving down, I didn’t sign on or claim anything but in 2005 I did and the following might amuse:

My Mother has been an invalid for over 20 years, my Father was her ‘carer’, now too, he needed looking after. I was given a Carers Allowance which was paid for by taking it from my Father which I guess is fair enough however, here I am looking after two people so when I put them both down on the form, it was returned to me “You can only claim for one not, both”, all a bit cranky I would suggest.

When my Father died last year, I had to reapply for my Mother and to be fair, the claim was dealt with in a timely fashion. It didn’t make any difference to me financially I am sure because it was topped up to a notional “minimum income” with “Income Support” until I was 60 and then replaced with “Pension Credits” but never the less, it could all me made simpler and therefore cheaper to administer.