Almost a year ago on the 7th April 2010, I wrote a blog entitled “How did we become such a burden?” It was sub-titled “unravelling the demographic and economic clash”. According to a report by the National Institute of Economic and Social Research, the situation needs to start “unravelling” very soon or it will be too late to avoid an even bigger economic disaster than the one caused by the recent banking crisis. The paper predicts that the ageing population will lead to a widening gap between the money we spend and the money we raise in taxes – some £85 billion per year by 2058. The “unravelling” options are stark and difficult both politically for Government and individually for the old and the young. For older people it means a later retirement age and lower levels of free health and social care. For the younger generations taking no action would mean a doubling of taxation to pay for the ageing population.
This is not a new message, it is just one that we collectively do not want to hear. The point of my blog last year was to attempt to explain the demographic growth in the ageing population, which didn’t happen overnight – it took decades – indeed generations. There was ample time to plan for the future, but the majority of us individually did not save enough in pensions and collectively our politicians focussed on the short-term rather than long-term planning because few of us would vote for the higher costs of social care if it meant higher taxes.
It is a collective failure which we will now have to redress —– and it won’t be easy.
In a blog in June 2010 I commented on an article in The Times by the journalist and economist Anatoly Kaletsky which forecast tension between generations. He accurately predicted there would have to be cutbacks in pensions, health care and long-term care.
Just look what has happened since.
In terms of pensions:-
- Retirement age has been abolished
- The State pension is now annually increased but only linked to CPI not RPI
- Eligibility for a State pension is gradually moving back toward 70
- Final salary pensions have all but disappeared in the private sector and are planned to be reduced in the public sector
- NHS elderly care is under severe criticism in terms of quality
- Social Services support is limited to critical and substantial cases only
- Residential care homes are struggling to survive economically
- Long-term care funding awaits the outcome of the Dilnot Commission but it is clear there will be a significant element of sharing the cost in future between the individual and the State
There is an inevitability about the direction that all these moves are taking, and no question that most people are going to have to pay more for their old age. It would be best to greet this outcome not as the burden we all have to carry, but as the blessing of all the additional years we have been given in later life. To do this, our focus needs to move away from costs and cuts towards a new and positive vision of ageing.