Social care and the prudence paradox

If you buy your own home and save for your old age you end up paying for your own stay in a care home should you need one.  If you rent your home and spend all your earnings the state will pay for your time in the care home at the end of your life.

All parties in government have wrestled with this paradox. The prudent pay more tax, and end up losing their capital if they need long term care. All parties have so far concluded it is too dear to offer free stays in care homes to all who need them. All have rightly concluded if someone without any assets needs looking after in old age the state needs to step in to help.

The resulting structure is complex and cumbersome. All individuals have a right to free health care from the NHS. The amounts and cost of NHS care usually escalate dramatically in the final years of a long life. Any time a person spends in hospital provides them with free board and lodging as well as health care. The aim, however, is to enforce a rigid distinction between health care – drugs, doctors time, operations – which are free, and social care including board and lodging which is  only free if you have no money of your own. The elderly person staying in hospital has an adjustment made to their state benefits and pension to reflect their reduced living costs.

The children are third parties in the struggle between  elderly person and the state over what the state will and will not pay for.  With elderly people living into their 90s, the children are often  pensioners themselves by the time the issue gets intense. Some seem to think they have a right to inherit the “family home” or the home of their parents. This is not normally the actual family home they lived in 60 years earlier, as people usually move on. Others say that if the elderly person has moved into a care home and is not going to move back to his or her home, it is only reasonable the property is sold and the money raised is used to pay the care home bills. No-one argues the children have to pay the care home bills of any elderly person who does not have the money to pay, though some chose to.

With social care back on the agenda, I would be interested in further views on what is the right balance between private payments and state assistance. Should prudence be better rewarded? If so, how?


  1. Prigger
    February 16, 2017

    It is an incongruous insurance company that only pays out to some of its policy holders.
    Let’s get real:-
    It is none of the State’s business how much a citizen possesses.

    “Any time a person spends in hospital provides them with free board and lodging”
    I didn’t realise when someone is hospitalised, the State pays the landlord the rent for the house until they are properly recovered and return home.

    Seriously. We should have a capitalist society or a socialist one. Make your mind up time!
    When you get old and confused you really don’t need bureaucrats raking through your money and possessions like Scrooge’s neighbours after his funeral.

    1. Mitchel
      February 17, 2017

      It’s not just a question of capitalism vs socialism it is one of the problems inherent in universal adult suffrage without contribution qualification.If enough people want a slice of what you’ve got they can vote in a government to legally relieve you of it.It may be dressed up as socialism but may actually be the result of baser motives.

  2. Eh?
    February 16, 2017

    If the Government is unwilling to honour payments for hospitals and care homes then it should say so at the very beginning of a persons employment. We can then have a General Election for say 18 year olds alone. But not the usual one vote. It must be a multiple vote covering 80 years, that is 16 x 5 yearly Xs for the political party which guarantees to honour the payments for health and care irrespective of ones possessions.

    Of course political parties would be required to make formal presentations ( as with insurance companies ) to all 18 year olds each year to gain or lose their vote,. Right, that has sorted the whole problem. MPs have no need to worry their pretty heads with a paradox any longer. Well put out their miseries.

  3. Brian Taylor
    February 16, 2017

    The insurance industry should be more active with the help of tax relief to buy an Anuity and let the insurers produce a table based on age and health as to how much premium you pay and of care that would be covered, if not then we have to take our chances on life and death,
    We all know the outcome it is the journey there that is uncertain.

  4. Mick
    February 16, 2017

    What really annoys me is that I’ve worked hard all my life to scrimp and save to pay my mortgage and bills and then you have people who’ve never done a days work in there life and had loads of money chucked at them and have had designer clothing and overseas holidays , and are going to be better off than me in retirement, makes my blood boil ??

    1. Jack
      February 16, 2017

      You honestly think benefits claimants have it good? How about the wealthy people who get risk-free interest income from the government, far in excess of what you’d get from the benefits office?

      The UK government paid £12.5bn (or £240m per week) to overseas holders of UK gilts last year alone. This reduces our standard of living by damaging the currency (overseas interest goes over the BoP). The good news is that once free of the Lisbon Treaty we will no longer be required to pay interest on government debt. But the bad news is JR probably won’t do anything about it, let alone bring up the issue.

      1. Richard1
        February 16, 2017

        What is this about?! The obligation to service debt has nothing to do with the Lisbon treaty and no sane govt would default on the obligation to pay interest or repay capital to the holders of govt bonds, UK or foreign.

        1. Jack
          February 17, 2017

          Who’s saying the government should default?! That’d be catastrophic for aggregate demand.

          I’m suggesting the UK government buying up all the bonds and replacing them with reserves with 0% interest. That would reduce aggregate demand only slightly, as reserves paying 0% interest are less inflationary than bonds/gilts paying risk-free interest.

      2. getahead
        February 16, 2017

        If someone has bought the government bond then he is entitled to the interest that that bond carries. Irrespective of where he lives.
        Not sure that JR are can do anything about this.

        1. Jack
          February 17, 2017

          Sure, but as a sovereign currency-issuer it is the UK government that ultimately decides the interest rate it wants to pay on its bonds. I say the BoE should keep the Bank rate at 0% forever and cease paying IoR.

          This also has a positive side-effect, lower rates reduce inflation and strengthen the currency, and the government has more “fiscal space” as it no longer has to pay unnecessary risk-free interest to bondholders.

          1. APL
            February 18, 2017

            Jack: “but as a sovereign currency-issuer it is the UK government that ultimately decides the interest rate it wants to pay on its bonds.”


            The British government gets to pay a favorable rate of interest on its debt because it is one of the least worst borrowers in the international debt market.

            It doesn’t decide that the rate will be x%. It receives x% because that’s what the market is prepared to pay for UK government debt.

            Venezuela by comparison might be expected to have great difficulty in selling its government debt at any interest rate.

            Jack: “lower rates reduce inflation and strengthen the currency,”

            Which is completely back to front.

            Higher rates make the UK £ a more attractive economy to lend in ( assuming the government isn’t likely to go bankrupt like Venezuela ). Bringing more investment into the country.

            More demand for the currency increases the value of the currency on the international markets.

            Higher interest rates also tends to reduce inflation. Higher interest rates tend to dis-incentivise reckless investments.

            On the other hand…

            Lower rates encourage individuals and businesses to leverage their operations on the basis of borrowing instead of organic growth. When the rates go down, so does the repayments. Frequently an entity will borrow more on the basis it can afford to because the borrowing rate has fallen.

            The problem comes when the central bank is forced to raise interest rates. That instantly destroys the entities that used excessive leverage, as they can no longer afford their debt repayments.

    2. Lifelogic
      February 16, 2017

      Much truth in that. Also many are having lots of children (as there is no financial disincentive for people on benefits so why not). This often at the expense of people who are having only one or no children as (after all the tax they pay to subsidise the feckless) they cannot afford them. One lot of working people paying for other people to have lots of children.

      Doubtless many of these children will follow in the same mode. Why not the tax benefit structure tells them to do so. As usual the state is the problem and not the solution.

      Alas May, Hammond and the BBC clearly think even more tax, more state, more dire NHS, an expensive rigged energy market and more red tape is the answer. That and workers on company boards and gender pay reporting.

      How can anyone sentient think this after living in the U.K. For 60 years? Have they seen none of the countless damage & disasters caused by the state.

      1. Lifelogic
        February 16, 2017

        Perhaps they should read, The Blunders of Our Governments By Anthony King or something similar. But then if they have not worked it out after about 60 years what hope is there for them? Why do they join the Conservatives when they clearly “think” in the Labour or Libdims mode?

        1. getahead
          February 16, 2017

          Why do they join the Conservatives when they clearly “think” in the Labour or Libdims mode?
          It’s called infiltration Ll.

        2. hefner
          February 16, 2017

          As you will have realised reading this very good book, a non negligible number of blunders were carried out by all Governments, as many by Conservative as by Labour.
          The problem might be the politicians suddenly propulsed into a Ministry, in which they know close to nothing, and on which they want to put an ideological mark.
          What is really awfully depressing is to realise that some of those clowns who made mistakes when they were in their thirties never apologised for them and have been going on even now, not realising how ridiculous they have been all along.

          1. libertarian
            February 17, 2017


            Totally agree with you. Politicians are the problem and not the solution.

            We need far far fewer of them, much smaller government and a set number of areas they are responsible for and to not allow mission creep , empire building and interfering in every facet of life

    3. Jim
      February 16, 2017

      Thats the very definition of socialism for you – from each according to ability, to each according to need. If you’re able to work hard, you must, but if you aren’t (or pretend you aren’t) you’ll get the same as the workers. We live in a de facto socialist state, the tax and benefit system creates it.

      1. margaret
        February 16, 2017

        It is not the state that is the problem . It is the despots who try to take out of it for business ,when it was intended for higher purposes. Then they try and pull it down , bring the Countries security down and let it be walked over by all and sundry because they do not like respect for homeland , self discipline , honesty and fairness. This is not due to political party or ideal , It is the rough who walk over anything decent , bad mouthing anyone who tries to create a better way of life. Having taken a degree in philosophy incorporating political philosophy which some rubbish , but then paradoxically try to quote ,with the pretensions of an intellectual ability, I can see that many political ideals were initiated by gentle people and ruined by misinterpretation .

    4. matthu
      February 16, 2017

      Let’s hope they won’t be in the bed next to you!

    5. margaret
      February 16, 2017

      I totally agree Mick . The harder you work and take the weight off the state the more you are penalised. There is also the issue of continuing our line by providing our children with an inheritance so they also dont have to depend on the state.

    6. TL
      February 16, 2017

      Here here Mick.

      My sister in law is testament to how the bone idle get everything and more for free.

      The day shegets put back to work is the day I will know the system works!

  5. eeyore
    February 16, 2017

    I didn’t know it was called the “Prudence Paradox”, but it’s even worse than Mr Redwood says. Those in care who pay for themselves actually subsidise those who don’t, often by hundreds of pounds a week.

    And that’s just part of a general situation in which the prudent and honourable are made to pay, over and over again, for the feckless, reckless, ruthless and shameless.

    Do politicians not know they are being taken for mugs?

    I do not believe governments have “wrestled” with this. On the contrary, I believe they complacently abuse the goodwill of decent citizens whenever possible to buy the approval and votes of those who deliberately work the system to their own advantage.

    The solution: a recognition from government that wise social policy involves rewarding good behaviour and penalising bad.

    1. getahead
      February 16, 2017

      It seems to me eeyore that, if you have any accumulated any assets, these must be passed on down the line before the government can gobble them up.

      1. getahead
        February 16, 2017

        Before senility arrives that is.

  6. Mark B
    February 16, 2017

    Good morning.

    A good subject and one in which I have some experience.

    But to begin with :-

    All parties have so far concluded it is too dear to offer free stays in care homes to all who need them.

    But none have concluded that giving away vast sums on the foreign aid budget on things that are of no value to the UK is somehow money well spent ?

    All individuals have a right to free health care from the NHS.

    It is not free, not if you are working and paying tax and NI. It is free at the point of service or, when it is really free, when you have never paid into the system.

    The children are third parties in the struggle between elderly person and the state over what the state will and will not pay for.

    This is where I have had a coming together with the State. By-enlarge I have found the State to be well meaning but practically useless, especially if you have funds and assets. I can understand the reasons why but, I cannot understand that in a Capitalist society we need to impoverish the prudent and enrich the feckless. This is Socialism by the backdoor.

    Some seem to think they have a right to inherit the “family home” or the home of their parents.

    People are entitled to inherit the assets of the deceased if that is what the deceased wanted. What irritates me is, at a point in a persons life when they are undergoing enormous stress, the State thinks that ‘it has a right to the family home and, all the assets’. I am sorry Mr.Redwood MP sir, you are wrong. The State never amassed these assets and therefore has less right to them.

    To me our government and State has grown too big. It fuel its great bulk it requires evermore monies to service the evermore ‘good causes’ it sees. But wherever government goes, calamity soon follows. You end up getting less, and the NHS is as good an example you will ever see of this, a far worse service at a far higher unit cost.

    And this is why I believe, and this is from personal experience on this very subject, that government is no good thing. And it is why I believe it should be both small and subservient to the people.

    1. Mark B
      February 16, 2017

      Oh and another thing.

      All the Political Parties have not concluded that it is far too expensive to keep illegal immigrants and asylum seekers in homes, hotels, B&B’s with money to spend and REALLY FREE healthcare. All able bodied people with nothing to do.

      You can find the money for your, Virtue Signalling !

  7. Richard1
    February 16, 2017

    It is perfectly reasonable to ask people to sell their homes to pay for old age care. There is no reason the taxpayer should subsidise inheritance. What also needs to happen is some payment for the NHS – fixed charges to see a doctor, refundable if you can’t afford it (as in France), fixed charges (£250?) for anyone who shows up to a&e drunk or on drugs etc

    1. Jagman84
      February 16, 2017

      Why not allow the care cost limit to be the maximum rental value of the property of the homeowner? That way, they make a contribution to the care costs but still leave an inheritance on death.

      1. David Price
        February 17, 2017

        Along those lines why not have the property be maintained and rented out with the revenue going to the Social Care coffers as long as the person is in care getting room and board. Once they are out of the care facility the property reverts to their estate.

    2. getahead
      February 16, 2017

      It has already been established that it is the prudent who must sell their houses to finance their old age care. The prudent will also have fully paid up their National Insurance contributions.
      It is clear that the prudent must pass on their assets to their children before care is needed,

  8. Old Albion
    February 16, 2017

    Strange how Scotland manages to pay for the care of the elderly. Perhaps we should reduce the financial subsidy the (dis)UK Gov. hands to them every year and use it for our own elderly in England.
    It may even stretch to free prescriptions, like Scotland
    No car-parking charges at hospitals, like Scotland.
    Unlikely I know as England has no representation……….

    1. Lithgae Dave
      February 16, 2017

      The ‘hotel costs’ of care homes in Scotland are not free. My father was in a care home in Edinburgh for several years before he died. He had to pay around £2,500 before his capital dropped below the threshold of around £20,000.

    2. John
      February 16, 2017

      Well said OA I was about to make the same point. We in England have and always will be shafted by the British government.

  9. Kenneth
    February 16, 2017

    Every time I see the BBC calling for more State social care I ask myself, where are the family?

    Where are the children or siblings or cousins who should be rallying round to their elderly?

    Surely, the more the State does, the less we do for ourselves. In practice, that means, if we heed all the calls to increase state provision for social care, that will create its own demand and so the vicious circle spins faster.

    State intervention has attempted to replace the care normally provided quite naturally from within the family and local community. It has made us a more selfish society.

    1. getahead
      February 16, 2017

      Not the family’s fault Kenneth. you should refer this to Ernest Bevin.

  10. Dave Andrews
    February 16, 2017

    The state needs to back-track from obligations for elderly care, in favour of the charities.
    Charities have people who care, whereas the state has people who just do it because it’s their job.
    If you have saved up assets, it’s likely you will benefit when you do need a care home, but perhaps the “family” home should be rented out while the owner is alive and a claim made on the sale price at the end of their life.
    Bed-blocking in hospitals could be alleviated if the country stopped stuffing the places with those how having been well have made themselves sick. A change in attitude is needed. Don’t think a hard day means sit in front of the TV to chill; it means go our for a walk.

  11. Nigel
    February 16, 2017

    We need to get everyone to take insurance to cover such costs. This probably cannot be done at one go, but we should move towards it.
    Margaret Thatcher’s Government allowed insurance premiums for healthcare insurance to be offset against tax. This initiative was broadly well received, especially by the unions many of whose members were covered by private medical insurance.
    Rather than bring back such initiatives, this government has increased the tax on insurance, making it more expensive for people to take these measure which alleviate pressure on the NHS.

    1. Lifelogic
      February 17, 2017

      Indeed you now pay three times. Once for the NHS, once in income tax on the insurance premium you pay and then 12% insurance premium tax on top. Thanks to Hammond.

      Does Hammond claim to be “low tax Conservative at heart” as Cameron did while presiding over endless increases and additional complexity? Since Osborne formed the Office of Tax Simplification the tax code length has nearly doubled yet again.

  12. Bob
    February 16, 2017

    The current system could have been designed by Karl Marx, wealth redistribution in it’s purest form.

    In the meantime, we are sending money overseas to countries with their own space & nuclear programs.

    We already pay enough tax, the govt just needs to sort out it’s priorities.

  13. alan jutson
    February 16, 2017

    Perhaps someone needs to think in wider terms, that will be rather fairer and less costly to all.

    Many elderly people have a spare bedroom which could be used for a live in, at home qualified carer/nurse.

    You thus still retain your pension, your home, your independence (such as it will be) will still be close to friends, family (if local), and will have an element of social company.

    This saves the cost of nursing home care, and all of the huge overheads that go with it.

    We used to have State paid, State Registered nurses, so why not State paid registered carers.
    Thus the only expense is the nurse/carers wages, as the usual drugs, equipment, etc are provided free anyway, no matter where you are.

    Surely the above is better than multiple 15-30 minute visits from a range of different people (who spend most of their time travelling) at odd hours during the day.

    It may help to a small degree with the housing crisis as well !

    Perhaps single people under nurse training, could do a year in the community as part of their full nursing course, a sort of pay back agreement for the training course they receive instead of them paying fees.

    Of course the above will not solve all of the problems, some people can only be cared for in hospital or a nursing home such are their requirements so for them there is perhaps little alternative.

    Perhaps we also need to ask ourselves how much care can/should the State provide, how much should we expect the family, if there is one, to do.
    But then that is an entirely different, but linked lengthy argument which I shall not cover here as brevity is required.

    Food for thought ?

  14. Ian Wragg
    February 16, 2017

    There’s some glaring anomalies regarding selling houses to fund care

    Many of the ex council houses were bought by the children of the actual tennant so there is a seamless transfer of ownership when the occupants require care.
    It seems only we in the private sector are pursued for our property .
    We paid for my parents care but what really annoyed me was the fact we had to pay about £100 per week more than council funded inmates.
    This is blatant discrimination and should be outlawed.

  15. A different Simon
    February 16, 2017

    MANY OF THOSE WHO RENT ARE PRUDENT and do not do so out of choice but because they have no choice thanks to 40 years of Govt policy and expansion of credit .

    Given that only a small number of people will require extensive old aged care in residential homes or with carers who live/stay with them , insurance would seem the obvious answer .

    There is good reason for this insurance to be provided by the state as either national insurance or a separate non-obligatory premium , payable in instalments throughout life like SERPS used to be .

    This issue cannot and should not be dealt with in isolation . It needs to be considered in conjunction with the issues which exacerbate it :-
    – land/house prices which have been manipulated up by vested interests and successive complicit governments since the 1970’s
    – absence of access to decent pensions for the majority
    – govt policy which has encouraged land price speculation by taxing labour and industry unreasonably highly to compensate for failure to tax land and in some cases actually subsidising it .

    1. A different Simon
      February 16, 2017

      PS there is nothing prudent about leveraging up a deposit 4X to purchase trophy accommodation which is well beyond your requirements .

      People seem to have subconsciously taken in by that message from Gordon Browne that boom and bust has been ended and forgotten that the land/housing market is cyclical .

      It’s frankly ridiculous that for those who own their own modest accommodation , it is usually amounts to well over half of their entire asset portfolio .

      What a terrible misallocation of assets . Where is the surplus meant to come from for these people to invest in industries which are desperate for new money for R&D , their professional advancement or their children’s education , music lessons or anything else for that matter ?

  16. stred
    February 16, 2017

    On top of the difference between the care available for non-savers and savers is the additional subsidy created by higher fees compared to the uneconomic fees paid by councils. The home effectively is making the saver pay a higher fee, towards £1500 per week, to subsidise the uneconomic fee charged to the non-saver’s council.

    The answer is to sell the home while fit and spend it on holidays, posh cars etc and give cash to the family, while renting.

  17. A.Sedgwick
    February 16, 2017

    It is a conundrum and most relevant when one spouse is left alone as couples can keep each other going. My only thought is the cost of private care home residence could be offset against income tax, which would remove most pensioners from the tax. Inheritance, if there is any left, tax could also be offset. Basically the prudent will always be prudent and likewise the spendthrift. The situation also highlights money wasted on EU and Aid – charity begins at home Dave, Nick et al.

  18. Bert Young
    February 16, 2017

    Social care implies it should be equal and fair for all ; those who have strived and become relatively independent ought not to be discriminated against . Means testing is not the way to go . Society does have a responsibility to take care of the weak but , there is a distinction between ” weak ” and ” skiving ” ; I have absolutely no sympathy with those who make little or no effort to provide for themselves and use every loophole in the benefits system . Much of the problem lies with the administration of the benefits system – there seems to be little effective check and follow up .

    An ageing population does have advantages and drawbacks . The extra costs involved in caring for the elderly ought not to fall on some shoulders more than others – certainly they should not be pushed from Central Government to Local Government . By being more prudent in foreign aid and the other unnecessary give-aways , there is plenty of room to divert funds for this purpose . Westminster should have this near the top of its agenda .

  19. John
    February 16, 2017

    So lets say someone moves from a small town in Scotland where the average wage is £18000 to London where they do well and earn well. They left 2 parents in Scotland and eventually they need social care which a small town struggles to provide. Meanwhile, one of their sons is paying high council tax in the South.

    What if we all carry a personal liability for social care for immediate family members which has an annual cap say of £X000 pa. That son that moved down to London could decide to take out insurance so if it became payable the insurance company would pick up the tax if he paid his premiums. Or, if no insurance taken out then the State claws it back through a reduction to his State pension and reduced Personal Allowance (currently £11000 tax free pa).

    There would of course be issues with excluding those who can’t pay but it could apply to the majority.

  20. Alan
    February 16, 2017

    I believe in free treatment in case of need from the NHS. However, most people admitted to hospital actually benefit financially from their stay. I see no reason for there not to at least be a charge for food as every patient would pay to eat outside hospital.
    Accommodation is slightly different as rent and mortgage costs remain whether in residence or not. Offsetting that, there is also a lack of personal spending whilst in hospital.
    This may sound harsh but I don’t see why a hospital admission should be financially beneficial – free treatment should mean exactly that.
    I think an awful lot of people in the UK look at the ‘family home’ as their first ever opportunity to really inherit from their parents (thanks to Maggie) , who often purchased with a legacy very much in mind. For many it represents access to the housing ladder. Taking that legacy is extremely emotive. Those that could not afford to buy their house should not be disadvantaged, those that chose not to should not benefit.

  21. MickN
    February 16, 2017

    Is it not free in Scotland or have I got that wrong? If only we could find someone to subsidise it – an English version of the Barnett Formula perhaps

    1. Dunedin
      February 16, 2017

      MickN – have a look at care home/nursing home prices in Scotland – it is not free and the prudent Scots have to sell homes to pay for care.

      The free bit is personal care – help with washing, dressing etc.

    2. Lithgae Dave
      February 16, 2017

      You are wrong. The free personal care in Scotland does not cover the ‘hotel costs’ of care homes. I have personal experience of this with my parents. As in England, the state only starts to pay when your capital gets below around £20,000.

  22. alte fritz
    February 16, 2017

    Random thoughts are that the state has no obligation to underwrite inheritance of the family home. The NHS seems too big to work in a coordinated way. I cannot believe that GPs could not take a lot of burden from A & E. People should take more responsibility for elderly relatives, but labour mobility and the tendency for houses to be built small over recent decades militates against that. I benefit from free prescriptions for no reason other than age. Why? I can well afford to pay.

    But the big question turns on keeping people alive who have no quality of life. Advances in medical science keep the body alive even when the brain is near dead and the body can do nothing. I am viscerally opposed to euthanasia but if people live longer, they need to work longer so that even if they are not net contributors, their call on the remainder of society is reduced. Try saying that in Stoke Central or Copeland.

    1. hefner
      February 16, 2017

      Euthanasia, a wrong word, when people with an incurable illness are prevented to take action themselves because of Parliament voting against the right to die, a right supported by a bit more than 70% of people in the last survey I am aware of.

      If there is a topics for which I would want my MP to act as a delegate and not a representative, this is the one.

  23. English Pensioner
    February 16, 2017

    Your first paragraph summarises the problem exactly and is one of the reasons why many people no longer see any point in saving for their old age. Certainly, if I’d known what I know now, I’d have blown all may savings within a year or so of retirement by going on a world cruise or something similar. I’m not surprised that my family, whilst having savings to meet any reasonable crisis, are certainly not building up any large ‘nest-egg’ for their retirement, the attitude being that they intend to enjoy their money whilst they are fit enough to do so.
    Successive governments have liked to pretend that we pay “National Insurance”; well they may call it that but in reality it is simply another tax and is definitely not insurance.
    I insure my car against various mishaps; if I have an accident and make a claim, the insurers don’t come round, look at my assets and insist that I can afford to pay the cost of repairing the damage, they pay out in accordance of the terms of the policy.
    Yet my so-called National Insurance does none of that, it took my premiums and will refuse to pay out should I make a claim whilst I have any assets in the bank.
    Any private company doing this would be prosecuted for fraud!

    1. cornishstu
      February 16, 2017

      And with respect to those of us yet to get our state pensions move the contracted maturity date.

  24. Mockbeggar
    February 16, 2017

    I’ve made this comment before, but if hospital costs are so much higher than care home costs, why doesn’t the local NHS trust pay local authorities to take ‘bed blockers’ into care homes?

  25. Anonymous
    February 16, 2017

    We are MAD to work and save in this country. We do it because it is instinctive.

    The gross injustice is that homeowners in carehomes pay inflated fees to subsidise those who are there courtesy of the taxpayer.

    Not only has the homeowner paid lots of tax in his life, and probably a tax on his pension – he pays an extra tax on the carehome bill.

    I have a similar issue with my own mother, who wishes to move to warden controlled accommodation. “You have to be on the social to get that in this area.”

  26. Richard Owen
    February 16, 2017

    We need an insurance scheme for social care, where everyone, except those in very difficult circumstances, pays in.

    The current system is indefensible as it rewards profligacy and fecklessness, and penalises prudence and hard work. So we can’t just tinker with this – it needs a fundamentally different model.

  27. Ex-expat Colin
    February 16, 2017

    Why was social care ever off the agenda..oh, the country’s finances were blown. Don’t we own a bank or two? Landlords…now there’s a thing!

    What does the EU do about this problem in their own states? I’m sure a state visit is in order to copy something. Likely not the Southern States.

    Get rid of the current lunatic spending that forces us into more debt and get establishments built and managed to assist/help the elderly. What was National Insurance…need a reminder.

  28. bigneil
    February 16, 2017

    The NHS is free? . Only to those who have arrived with their hands outstretched, paid nothing and get their whole lives on the UK taxpayer.
    As for the rise in council tax, all now using the “social care” term to increase the rise. The UK taxpayer will have to cough up yet again for the same people, who get their benefits for having arrived. They get UK taxpayer money, for everything. Even better, for them, if they are illegally here. Everything supplied, for doing something illegal. Crime really does pay if you are foreign and come here illegally – – and they all know it.

  29. John B
    February 16, 2017

    Not paradox, incentive.

    If you know somebody else is going to pay for you, then why bother to make provision for yourself?

    If costs are socialised and those who pay more end up getting least and those who pay little or nothing get most, that will lead to resentment.

    The cause? The Welfare State which removes responsibility for one’s self and transfers it to anonymous others

    The cure? Simple. Get rid of the Welfare State, then all must learn to shift for themselves as our ancestors did quite successfully before the State nationalised self-responsibility.

    1. Lifelogic
      February 17, 2017

      Exactly. The state once again is the problem.

  30. MPC
    February 16, 2017

    People who don’t own their own homes are not necessarily feckless. I think it’s right to have to use one’s property assets in the current system to fund care-there is no ‘right to inherit’. Surely it’s time to consider an element of compulsory insurance as applies in other countries. Some truly independent comparative research into practice elsewhere could pave the way towards a more balanced approach to this and health provision generally. After all no other countries appear to emulate the UK approach.

    1. fedupsoutherner
      February 17, 2017


      You are right. My parents were not feckless but my father was ill for much of his life and so a mortgage was out of the question. My mother had 4 children and could not work until we were old enough to look after ourselves. My father died at 62 and my mother is now 82 and very ill. She struggles in a studio flat with social care for an hour a day which she pays £60 from her pension and disability allowance. She doesn’t want much as she cannot get out at all on her own. They were not feckless.

  31. Sir Real
    February 16, 2017

    Percentage of old people in residential care is very small. Given average length of stay is short v rising house prices there is usually something left over.
    I’m looking forward to leaving my shell (A + Grade ) behind and letting my soul fly round the universe. Cost of shell disposal rather annoying.

  32. Narrow shoulders
    February 16, 2017

    The elderly person staying in hospital has an adjustment made to their state benefits and pension to reflect their reduced living costs

    So treat everyone the same. Pay for all or pay for no one.

    Provide the basic level of care and lodging for all and make deductions from all. If the basic pension does not cover the deductions for those better off that is OK because they are not being handed out benefits which are then deducted from the less well off in receipt of benefits.

    If the better off person wants more luxurious accommodation or treatment they perceive as better they can use their own funds to top up that provided to all by the state.

    If there is not enough money for this, I ask what are you as the government doing with all the money that is more important?

  33. scottspeig
    February 16, 2017

    Social care needs to be universal in that it matters not one jot how much money you have – the same as health.

    In this case, there are only two methods to achieve this:

    1. No social care by the government. This focuses reliance onto charity groups
    2. All socail care by the government. This creates a large tax bill that needs to be paid.

    One method would be to change tax from an income tax to a wealth tax. This has all sorts of issues too.

  34. forthurst
    February 16, 2017

    Would it not behove the government to make it easier for more people to purchase their own homes; there are many people who pay far more in rent, especially, over a lifetime than those who own their own homes pay to the mortgagee. Owner occupation has been declining as a result of bad government policy whilst the rentier class has grown some with enormous portfolios of properties which the government has enabled them to purchase in competition with potential owner occupiers. If there is a problem, then the first step should be to try to minimise it.

    There is also the issue of who should be entitled to a reasonable standard of free care in old age; I would suggest that those who have worked all their lives should and those that are recent arrivals or have lived off benefits should not have any statutary entitlement.

  35. Juliet
    February 16, 2017

    431,000 people will be better off than aged pensioners who are mortgage free and living off state / private pension income. Something is wrong when a person can migrate to the UK and fair better than its own citizens.

    Pensioners contribute to the NHS over several years and end up paying for Social Care twice over because EU nationals under the freedom of movement blanket can access the service for free whether they contribute or not. Disappointing that my generation and my parents will be let down in retirement

    NHS needs reform. Available free to UK citizens , everyone else should pay to use it.

    1. John
      February 16, 2017

      Social old age care homes were not part of the Beverage plan.

      Lots are getting the two confused. This is not about the NHS but about board, lodging, food and care in old age, not hospital treatment.

      I recon Beverage would have laughed his head off at the idea.

    2. Lifelogic
      February 17, 2017

      We should all pay or insure, other than those few truly unable to.

  36. Northern mountaineer
    February 16, 2017

    Should prudence be better rewarded? If so, how?

    Indeed!! Prudence is a virtue, but it is also financial suicide within our dependent culture. Better to blow everything, pay no tax, get every benefit possible, spend, spend, spend!
    How to reward savers, those who live independent lives, those who are NET contributors to the state? The difficult question, as our society is not built on virtue. The virtuous do get crucified.

  37. margaret
    February 16, 2017

    Home care is the preferred choice for many. The only thing the state needs to provide then is staff and a few appliances. Of course this cannot always be the best choice , however the business side of Care homes and Nursing homes take large amounts of the states money to make them rich.

    1. Monty
      February 16, 2017

      I’m sure there is something in that Margaret, it seems to me that care home fees are way over the top. What I suspect is going on, is that residents are shelling out to cover the property loan repayments, then the care home provider builds up a very lucrative property portfolio. I suspect profiteering is going on.

      The way around that would be to set up some kind of trust, build a dedicated retirement community of linked bungalows, with maybe a small central hub, and let prospective residents buy those bungalows. There would be a care fee to pay, so pensions would have to be adequate to cover that. The trustees would then be in a position to award contracts for services only. There would be far less scope for profiteering. Self-funders only of course, and it would remove the risk of old married couples being split up. And in the fullness of time, the residents would know the sale of their bungalow would provide at least some legacy for their children.

  38. ian
    February 16, 2017

    It was only promises made by governments for vote, it just older people believed what they were being told, at the moment they get the triple lock pension because con party think that more pensioners vote more than anyone else so they are paying them for loyalty, at the other end you have uni students who were loaning about 16,000 over three years at one percent per year interest and you start paying back 16,000 till 2010 and then it went up to 40,000 over three years with a min interest rate of 3 percent and you start paying back at 21,000 and if you earn over a certain amount the interest rate go up with inflation to 5 6 7 percent with the RPI which is at 2.6 at the moment and were told that it would not effect their mortgage but the first thing they asked is, do you have any uni debt and if you do they cut down the amount you can borrow, tribal politics is all lies to win votes, the con party have spent 52 billion on pensioners up to and including 2017, now i ask you is that sustainable for the next 7 years.

  39. PSD
    February 16, 2017

    I think the best long term answer is a form of saving plan paid as a component of tax which is then ring fenced off as an untouchable fund. Do the same with pensions and health care so accrued savings are built up over a lifetime

    1. hefner
      February 16, 2017

      Problem with a “saving plan” is that it will very likely be administered by banks and/or insurance companies who first thing take their cut of any saved money.
      Other possibility would be an ISA-style plan, hoping that both the “market” and the currency do not play (too many) tricks on those savings over the 40-50-60 years one will be contributing.
      Seeing the present state of the average employee/worker pension, I am not too optimistic about the outcome.

  40. Ed Mahony
    February 16, 2017

    There are lots of young people working really hard at the moment and NOT ABLE to buy their own home, through no fault of their own. Instead, they’re paying rent that often goes to an older or retired landlord.

    And so these young don’t get the opportunity to be prudent and save for the long-term (unlike the older or retired landlord they’re paying their rent to …).

    This isn’t just a problem affecting the working class young, but the middle class young as well, with relatively good salaries but with house prices beyond what they can afford as well as other expenses.

    1. Ed Mahony
      February 16, 2017

      Something i know nothing about, but is it not possible to reward people in investing in British based companies – large, medium and start-ups, helping British industry and hopefully British investors (although of course, don’t put all your eggs all in one basket) – instead of just focusing so much on investing in property at expense of young people and British entrepreneurs and companies wanting to raise money?

      1. Mitchel
        February 17, 2017

        There are tax efficient vehicles and incentives for investment in start up or development-stage companies.

      2. libertarian
        February 17, 2017

        Ed Mahony

        Well at last you finally acknowledge that you know nothing of business.

        People are rewarded for risking investments in business by getting a return on their investment in the form of a dividend payment or a portion of the sale price should the shares/company be bought.

        The stock market is far riskier and less profitable than property, however it is shorter term.

        On your point re housing, I really dont see what point you think you’re making about the age of a landlord. You also seem to be confused about renting and buying. Yes young people have a much harder time of saving a deposit to buy a house , these are the reasons why

        1) Young people on the whole start earning later in life than previous generations

        2) A lot of young people start working life already in debt to tune of £40k for their university education

        3) The government are manipulating interest rates to keep them artificially low which means any savings accumulated by young people attracts almost no interest

        4) The housing stock is spread amongst a far greater number of the population

        5) Following the 07/08 banking crash banks have been far less likely to lend 100% for mortgages

        6) Owning to supply and demand the housing that is available in desirable areas is incredibly expensive

        1. Ed Mahony
          February 17, 2017

          ‘Well at last you finally acknowledge that you know nothing of business’

          – i said i don’t know a lot about the investment business. Business is much, much bigger than this!

          And I wasn’t making some big claim about anything here. I was just responding to Mr Redwood who asked for people’s thoughts and I just asked him to remember the young (including young Conservative voters) struggling to buy a home for their family. This is true. That’s all.


          1. A different Simon
            February 17, 2017

            You are right Ed Mahony ,

            Sky high land / house prices are a sign of a terrible misallocation of resources .

            The money could have been better used to create real companies which create real jobs .

            I’ve used the enterprise investment scheme (EIS) to participate in pre-ipo funding of early stage companies .

            Although the scheme offers capital gains tax and inheritance tax benefits , the prime consideration should always be the company and investment itself , not favourable tax treatment .

            Australia and Denmark incentivise R&D better and also their university research departments integrate better with start-ups than the UK imho so there is room for us to improve .

          2. hefner
            February 21, 2017

            Libertarian (who by the way does not seem to understand the difference between democracy and freedom)
            I am fed up with “business” people considering themselves as the cream of the cream.
            There are a few (a few!) brilliant business people, usually entrepreneurs of some sort, and a large majority of so-so plain average business people. Simply because you might have to attend some kind of a board meeting or fill a tax return including business rates does not make you super-extra intelligent able to comment sensibly on all topics.

        2. A different Simon
          February 17, 2017

          Quote “The stock market is far riskier and less profitable than property, however it is shorter term.”

          That has only been true since the deregulation of finance and reduction of taxation on land , both if which only really got going in the 1970’s .

          So land/property has been a better investment than the stock market (i.e. listed companies) for only 40 out of the last 300 years .

          It should be pretty obvious , even to a housing bull like you , that land/house prices are maxed out and can only go one way in the long run .

          All it requires is for the demographics to change so that politicians start chasing votes from renters/have nots rather than freeholders and landlords .

          High land/house prices make Britain uncompetitive and drive jobs elsewhere .

          Whilst stock markets are at historic highs with valuations on ridiculous multiples of earnings , a carefully selected set of growth companies should outperform the stock market in general and housing too .

  41. Know-dice
    February 16, 2017

    We had to sell my mother’s house in order to finance around £300,000 of nursing home fees.

    What gets me is that the “feckless” get constantly rewarded for THEIR choice of lifestyle. I have no problem with social care etc. being a “safety net” but too often you hear of those taking advantage of our generous benefits and social care systems – yes I know I shouldn’t believe everything that I read in The DM… 🙁

    I have no solution to this other than maybe some tax or IHT rate relief for relatives against monies paid for “social care”

    1. Ed Mahony
      February 17, 2017

      ‘What gets me is that the “feckless” get constantly rewarded for THEIR choice of lifestyle’

      – I agree. But i think people from every walk of life are screwing the system (in different ways). It’s not just unfair to focus on one group of people, it’s also economically unsound.

  42. It's not just me
    February 16, 2017

    A reintroduction of the concept of the undeserving poor and the workhouse?

    1. Ed Mahony
      February 17, 2017

      ‘A reintroduction of the concept of the undeserving poor and the workhouse?’

      – But then you have to introduce the concept of the ‘underserving rich and prison’ – for those rich who make their money from greed and / or corruption as opposed to hard work and work ethic, and who neglect the Conservative moral principle of ‘with privilege comes responsibility.

      I think we should avoid both as one leads to an extreme form of Conservatism and the other to an extreme form of socialism – both dangerous to us all as individuals, families and country.

  43. David Edwards
    February 16, 2017

    Without wishing to sound like a character in a “You were lucky” Monty Python sketch my father was brought up in serious poverty but went on to become a self employed builder who owned his home outright before he was 40. Sadly his health failed him and his house was no longer suitable for him. My brother and I built a bungalow for him in our spare time. After my father died my mother needed to go into a care home so the bungalow was sold and the proceeds sit in a bank slowly draining away in care home fees.

    I would far rather pay a flat rate death tax than see the fruits of his/our labour be subjected to the lottery of my mother’s longevity.

    1. Iain Gill
      February 16, 2017

      My dad built his house from a shell, my mother is on her own now, because it was hand built by dad the House means much more to us than money.

      1. Iain Gill
        February 17, 2017

        and if the state ends up taking away from the family, to pay for my mothers care, a house which my dad built with his own hands then my disgust will be endless

        indeed I may well take a sledge hammer to it myself first

    2. Lifelogic
      February 17, 2017

      Indeed it is only I understand about one in four need long term care and not always for very long. Some insurance policy is needed to protect those who do need lengthy care.

      1. alan jutson
        February 17, 2017


        Increase the National Insurance tax to cover the cost/risk ?
        and perhaps allow all who have contributed to have free nursing care.

        Those who do not have a full contribution record to only have the same percentage of benefit against percentage of contributions made.

        Given the fact that the vast majority of people who are in Nursing homes are people who have retired, then they should have a full contribution record.

        Not really difficult to administer, as the figures are already on record.

        1. a-tracy
          February 18, 2017

          Increase National Insurance! Are you kidding, we already pay 12% employee, 13.8% employer, 3% employee nest, 3% employer nest. Then the 25 year plus and younger generations that went to University are paying 9% graduate tax over £17k plus an extra 6% graduate tax if they took on a masters loan (English grads only).

          I’d rather lose my children’s inheritance to pay for my care than tax the next generation more, if they want their inheritance more they’ll have to look after me themselves as we looked after my Nan after her Stroke between us all and that was with no inheritance as she owned nothing.

          Serial claimants living off the State their entire life and I know many, housing benefits, child benefits, adhd or other condition benefits, end up claiming their entire lives from cradle to grave I read a report on it once about how 15% of claimants at 25 go on to claim the most from the state and insurance companies.

  44. ian
    February 16, 2017

    When it comes it, all depends on what know and who you know and what area you live in, one person in a care home can be on a 180 pounds a week and the other one on 20 pounds a week and both have their bills at the care home paid for and then another person has to pay for themselves all in the same care home.

    Since 2000 most people loan money against the house in old age and give the money kids and go on holidays and the house goes to the mortgage company because they do not want leave the government any money mainly because of the treatment they have received from them over the years and more importantly do not want their money to go to overseas people and countries and the rich hide their money in tax heavens with property deeds also trusts, myself, will be buying a robot when the time comes to do all the things that i will not be able to do and then if i to bad i just order the robot to kill me.

    When you have councils and governments that have got no money and giving away money to overseas people and countries with your kids jobs as well when they have no money and tell you, we are a rich country all of the time so it ok to give all this money away and fight wars and so on and then turn round and tell you there nothing left for social care that we promised because we have given it all away and there nothing for your kids, just debt.

  45. The Prangwizard
    February 16, 2017

    Cut the overseas aid budget in half. I bitterly resent some of my money going to China and India for example. I’d then cut the other half. What difference has the billions upon billions spent already made? After decades we are still spending, proving that it has been wasted.

    Spend it here.

  46. Anna
    February 16, 2017

    I care for my severely disabled husband (wheelchair-bound because of advanced Parkinson’s disease, two heart attacks and a spinal injury after a fall downstairs) at home with the help of carers and want to keep him at home as long as possible not least because the care he has received in care homes when I have had a brief respite has been far inferior to the care we give him at home.

    Moreover, the charges paid by self-funding residents in care homes are weighted to offset the shortfall in payments made by local councils for non-paying residents so we pay not only for ourselves but also a chunk of other people’s costs. We have assiduously paid our taxes and saved prudently throughout our working lives and find it iniquitous that we should be penalised in this way.

    It is now increasingly difficult to obtain even paid-for respite care. In the past, care homes had respite beds to give carers a break. Now it is a matter of chance: if there is a spare bed because a resident is in hospital or has recently died you might get a week’s respite care at about £800 a week. Often my only option is to buy in 24/7 care at home at about £2000 a week but I need occasional breaks. Caring is recognised as extremely stress-inducing.

    If he has to go into care eventually because I can no longer cope, I will still have the costs of running my home and keeping myself as well as funding his care. Once our savings are exhausted, half his pension can be claimed as a contribution to his care home costs, further reducing my income. I have sleepless nights about the future.

  47. acorn
    February 16, 2017

    If I told you that this paradox is the result of individuals being allowed to hoard land for profit, you wouldn’t believe me; its too complex to explain on this site. Basically, sit on a piece of land, at no cost, until the planners get nearer and nearer to it; and, its value goes up and up. Acquiring that land for social purposes such as housing for rent, becomes very expensive. The land baron makes a killing; 70% of the average price of a dwelling built on that land, is the cost of the land it sits on.

    In the EU, many states don’t allow such profiteering; they can purchase land at agricultural value from land barons. The local council makes the profit from the land, by giving it planning consent for something the community it represents, wants built on that land. The local council uses any profit to fund the care homes and other social services etc.

    1. libertarian
      February 17, 2017


      Show me the data and I’ll believe you. Exactly how much land is being hoarded right now and more importantly where is it?

  48. ian
    February 16, 2017

    They cannot even send a care worker around to help you because they have not got the money, the story used to be we need more cheap overseas workers but real story coming out now, shortage of money, not cheap workers, like i said before, its all going into the financial black hole made by the bankers and mps in parliament and supporting overseas people and countries also institution packed full of liberals and lefties and i have no doubt your all be voting for more of the same at the next election with the 535 liberal mps who have it in for you and your families and that not for get the house lords, fools never learn they just keep doing the same thing hoping that the result will different next time.

  49. Raymond
    February 16, 2017

    I think the primary responsibility to care for the elderly (or the young or infirm) is the family. If an elderly person can not fund their own care, or his/her family can’t or won’t support him/her then, out of charity, there is a community responsibility for the individual reflected in state support. But how to avoid free riders (e.g. the feckless) I do not know. Of course some people entering old age have spent their lives in service of one sort or another without pecuniary gain and thus can’t afford their own care; and may be said to be more worthy of care than a venal rich person who can fund their own care. Sorry, I don’t know the answer.

  50. rick hamilton
    February 17, 2017

    Expats who lived abroad for more than 15 years lost their vote, even if they were employed by British exporters and had homes and family in the UK, and even if they paid UK taxes. This undeserved injustice is supposed to end soon after an extended battle.

    However loss of vote, albeit a well-deserved injustice, could be applied to those who live on welfare and who will not accept work or move to where it is available. They are always going to vote for the party offering the most handouts. No prizes for guessing which one.

  51. Original Richard
    February 17, 2017

    This is indeed a paradox.

    Large scale immigration to solve this problem will ultimately fail, as do all Ponzi schemes, as there will be neither sufficient tax revenue for the state to solve this problem nor will the country be sufficiently homogeneous to enable a large scale social solution to be found.

    The only solution will be to make children responsible for the care of their parents with the children making the decision as to whether to sell the house to pay for their parents’ care or look after their parents themselves and keep the house. Perhaps with some changes to inheritance tax or pensions or savings to help financially.

    At the same time it will also be necessary to introduce measures to limit family sizes, something that will eventually become needed anyway.

  52. a-tracy
    February 17, 2017

    We need better planners who take advice from social anthropologists and psychologists and modern social geographers and do things differently than segmenting groups, building out of town bungalows and modern box home for all families and build and plan better.

    We need retirement apartments of a good size to heat, light, airy, modern, mobility aids built in, walk in showers, latest technology in beds, toilets etc. Able to move a wheelchair in. Balconies with self watering planters. Overlooking a quiet courtyard. On the other side of the road family homes with sufficient size gardens, communal spaces, underground parking areas. Recycling shoots.

    We should encourage Mums to work together to create crèches and obtain their childcare, and nursing level 3 qualifications working and training in the community to look out for their elderly neighbours and offer companionship. The retired could help out with reading with the children.

  53. hefner
    February 21, 2017

    One thing that does not seem to have caught the attention of the MPs or the contributors to this blog is that a lot of people in their 50s-60s already play a non-negligible part in the care of their parents. The really unlucky ones are those with old-age diseased parents (Parkinson, dementia, …) who very often need stop working to care for their elders at a time when they might still need to pay a mortgage, build up their pension, or look after (on a part-time basis) their grand’children.

    It is “interesting” to see the Government tell us to be more involved in the care of our elderly when a lot of people already are involved, while they reduce the money going into social care, and encourage us to work longer.

    Can’t the MPs and the Government see the contradictions in what they ask of us?

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