“Home Alone”

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!

This entry was posted in ELDERLY UK POLICY, RETIREMENT HOUSING and tagged , , . Bookmark the permalink.

One Response to “Home Alone”

  1. davidwfreeman237 says:

    Home alone/Feel Good Inaction & Conspiracy of Silence!!
    I comment in one reply, as I believe all issues are connected. The aurguement for asset rich cash poor is a true statement for the elderly now those over 65/70. They will have to be dragged kicking and screaming to some form of agrreement. or financial arrangement privately or with the government of the day, and pay the cost of home care and residential or care home/nursing home fees. It is just a question of scale!
    What concerns me I am 70 is my children and those of the baby boom of the 50’s They have been and are living in difficult times of finial reward (-The insurace scandal of ‘with profits funds’; the insurance ‘pension funds investment scandal’; the banking crash recently; and the high mortgage rates compared to earnings and the wage freezes associated with the times of the late 80 & 90’s.-). This generation and that of my children will not have the assests to convert into cash, and neither the cash to pay for care. The Government and the banks have encouraged us all to live ‘High on the Hog’ and spend spend spend for the sake of the economy and jobs!!!
    This makes me believe the next generation(S) will have to devise a method of more equitable wealth to pay for old age ? and we may have to park our ideals on immigration and planning? It is going to be rough sailing, and some deep thiking will be required, with compassion and consideration for each other , I trust all will go well and we elect the politicians we deserve and require.
    Proberably those of 65/72 have small cash assets and reasonable property assets which will need to be liquidated.

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