The cost of care comes back to the age-old story of who pays for the elderly when they can no longer look after themselves.
As people live longer due to a better diet and improved healthcare, the basic misconception that underlies retirement is long term care is not free at the point of delivery like the National Health Service.
Long term care comes in two types -
• Nursing care to help individuals live in their homes longer or in a care home
• Health care for individuals who need continuing medical assistance
The first is a paid-for service and the second is free, like any other healthcare.
Paying for long term care is a matter of perception. Many over 55s perceive nursing care as a right and not as something they should pay for, so they fail to save and plan for the eventuality.
The type of care many receive is blurred as well as a mixture of nursing and health care.
The result is everyone else has to pay, but because the number of younger workers contributing tax and national insurance is falling and the number of over 55s is rising, the economy has an imbalance that needs to shift the burden of funding long term care to later life.
In many cases, today’s older generation are in denial, claiming they won’t pay or can’t pay for their care.
It’s unfair to make the younger generation pay – and by younger, it’s typically those approaching their own retirement who are spending their own savings on caring for their older relatives.
The solution is unclear. Composing another financial product designed to pay for the cost of care adds to the unfairness if the contributions are not compulsory.
After all, why should two workers stand beside each other, earn the same and toil as hard as each other, only for one to make a contribution to their long term care in later years while the other gets the same benefit for free?
