TALKING about death is never easy. Combine it with discussion of that other certainty – taxation – and you’re entering into very dangerous territory. Exchanges between National readers this week highlighted one of the difficulties of discussing money and old age.
Alistair Barron observed that while Chancellor Jeremy Hunt had restored the triple lock on state pensions, he had declined to raise the personal tax threshold. This, he said, would mean “pensioners on the basic state pension are going to start paying tax.”
Susan FG Forde replied to point out that due to the meagre level at which the basic state pension is set, the income of those receiving it is well below the threshold of £12,570 after which income tax is payable.
Both readers are correct, however, as Alastair Gordon points out today. The group we call “pensioners” includes a diverse range of people, many of whom will have private pensions in addition to their state pension entitlement. Indeed, many will still be working and therefore have three sources of income – two pensions plus their wages – the total of which could quite easily exceed £12,570. That’s before we even address wealth.
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The problem with the emotive general term “pensioners” is that it tends to conjure up images of those who are poor, frail and vulnerable when the reality is that many UK pensioners are wealthy, healthy and making all sorts of valuable contributions to society. Indeed, a significant cause of the current elderly care crisis is the fact that people are living for so much longer.
The phrase “baby boomers” has been used as a convenient shorthand for those who have seen their personal fortunes rise due to the lucky post-war timing of their births, but half of those people are pensioners already, and the other half will be soon. They are certainly not all wealthy homeowners, but many are. Is this the group we bring to mind when reading headlines about pensioners and their incomes?
The question of whether the wealthy should be expected to use at least some of that wealth to fund their own care at the end of their lives is a contentious one, as Theresa May found to her cost when she was Prime Minister. But the timebomb May was seeking to defuse is still ticking, and as Scotland prepares to create a National Care Service against a backdrop of UK austerity, the question of funding is more pressing than ever.
Media coverage of care home costs too often seems presented to maximise outrage among those reading or listening. We constantly hear talk of people having to sell their homes to pay for their care – even when that is not technically true and they are instead deferring the care home fees until after their death. What is actually meant is that the value of an inheritance is reduced – and therein lies the rub.
It’s a common refrain that someone worked hard all of their life to provide for their family, and therefore should not have to sell their home (post-death) to pay for their own care. It’s seen as impolite to suggest that those advancing this argument are less concerned about the efforts their parents or grandparents put into acquiring a given property (which then ballooned in value due to factors beyond their influence) and more interested in how much they personally stand to gain from the work (and luck) of others.
I’m sure those heirs wouldn’t mind paying a little more in income tax if it meant a greater proportion of care home costs came out of the public purse instead of their own private nest eggs, but surely they can appreciate this is not fair in the grand scheme of things. In particular, it’s a kick in the teeth to those others of their own generation and younger who are trapped in poverty despite working hard and paying tax and who have no hope of scraping together a deposit for a flat, let alone passing on a house (assuming they can afford to have children to pass it on to).
Last year, the Telegraph risked biting the hands that feed it by publishing a comment piece by Paul Lewis, the presenter of BBC Radio 4’s Money Box, headlined “You don’t have to sell your home to pay for care – but you should”. He argued it makes sense for people with properties to sell up and use the value to pay for “the best care in the nicest place that you can afford”. Rather pointedly, he observed that “any decent heirs would rather you used the money to make yourself as comfortable and happy as you can be in your final years.”
If only we could be confident that decent heirs outnumber the circling vultures who see every extra care expense as coming out of their own pockets. It’s a grim paradox that those who treat their elderly “loved ones” as piggy banks are the least deserving of any inheritance at all.
If we want elderly care homes worthy of the name, they need to be funded properly and run by staff who feel valued. The needs of residents must be the top priority – not the future bank balances of their relatives. Without nationalisation, this will be a major challenge. But changing the poisonous narrative around older people’s assets would be a good place to start.
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Callum Baird, Editor of The National
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