This blog follows on from “Feel Good Inaction” (to see it click on previous post in the ARCHIVE, 20th May 2012), which was written in response to an open letter to the Prime Minister from 78 charities, calling for action to deal with the crisis in care of the elderly. A front page article in the Daily Mail echoed the cause and made reference to “the scandal of tens of thousands of pensioners every year having to sell their house to fund the costs of residential care”.
Low and behold the very next day on 9th May, the same paper has a full-page article on equity release, complete with full supporting adverts for its “free guide to equity release”. Don’t misunderstand me, I am convinced that releasing equity from your home is a major step forward for many older people. However, the Daily Mail does not seem to be able to make up its mind. Most of its headlines berate the Government for not spending enough on the elderly and forcing them to sell their homes to pay for care. The paper is kidding older people into thinking they can keep all their wealth and the state will somehow provide. This is not going to happen and the newspaper should change its populist outcry and be more realistic about what is possible in the current and future economic climate.
A small cameo article sums up the paper’s contradictory thinking. It talks about a 93-year-old lady who is “forced” to take out a mortgage to pay for her care. The lady’s house is valued at £650,000, so she certainly has a substantial asset. Yet the paper stills sees it as an injustice that she has to pay for her own care. If it was cash rather than bricks and mortar that she had, I am sure they would adopt a different view ! The lady herself complains that she will be able to leave her children “hardly anything”. Since she is 93, her children are themselves probably in their 60’s and more than likely will have paid off their own mortgages. By using the equity in her home, she would be able to buy domiciliary care at home for the next 10 years and still be left having to pay inheritance tax.
The lady’s situation is not untypical of many people and it would be surprising if her children would not prefer their mother to have a good last few years, even it is at the expense of some of their future legacy.
The Government will never have enough money to pay for all the care and support that asset wealthy elderly home owners require. They have acquired most of their property wealth gratuitously through property price inflation. Honesty from politicians, the charity sector and campaigning newspapers needs to dispel this muddled thinking.
Only reality will change things!