You’ve worked hard, and paid the state handsomely for the privilege. Long ago, you made a prudent investment in your own home, to which you’ve naturally grown attached. You’ve probably paid off the mortgage. Gratifyingly, the modest property has increased in value. You hope to pass on this treasured asset to your children, helping to compensate for the difficulty they’ve been having in affording homes of their own.
But your health is failing. Your kids are worried; they don’t live nearby, and last night making dinner you set the kitchen on fire. You may have lost your spouse, or your spouse, too, has grown fragile. A broken hip or alarming memory loss presses the issue: it’s time for residential care.
Yet to your nauseous astonishment, care home fees in your country average £36,000 per year, and upwards of £45,000 in the south-east (prices sure to keep rising). Since you’ve paid your own way for decades, and carried others besides, you imagine that your government will surely pick up the tab. You’ve contributed far more to the system than you ever took out, and for the first time you need something back.
Another surprise: if you have assets of more than £23,250 — chump change, since that includes the value of your beloved house, and that miserable threshold has just been frozen for the next two years — you’re on your own. You’ll have to sell the house. It doesn’t seem fair.
Think again. The word “fair” in your country has a very specific meaning: ”removes a maximum amount of money from people who earn it and gives it to people who don’t”. In which case your paying for your old age, after having paid for many of your compatriots’ old ages while you were working, is very, very fair.
But all three political parties claimed in the last general election that in these circumstances they would let you keep your house. Don’t be a sucker. They’ve got your vote already.
Addressing a London think-tank in February as a member of a three-man advisory commission on this very subject, Lord Warner was more candid. To meet the escalating costs of the elderly, housing assets represent “a big chunk of potential resource” too juicy to resist. “Any fantasy about 100 per cent universal state provision,” he said starkly, “forget it.”
You may be fond of the way the light enters the conservatory in the mornings, but to the state your house is a three-dimensional bank account; it just has a postcode instead of a sort code. As the state has always pillaged your bank accounts, it will pillage your house for your care. Does it really matter? By definition, you’re no longer living there.
Granted, some of your neighbours have saved nothing for their retirements, and the state will care for these folks in their twilight years, soup to nuts. But then, these are some of the same people who didn’t buy a home. They may have been given lodging for free, just as they’ve been collecting an assortment of cheques from — well, from you, frankly. So why are you so surprised?
Get your head around this: if you’ve always paid your way in your working life, you’ll pay your way as you die. You’ve bought your home, your food, your clothes, your electricity and petrol. Why should old age be any different? You’ve never depended on anybody, and you’re not going to depend on anybody at 95, either.
You’re demographically unlucky. Seventeen million of your compatriots alive today should live to 100. A century ago only 5 per cent of the UK population, over-65s constitute more than 15 per cent now, growing to nearly a quarter of Britons in 20 years — by which time you may have just over two people of working age to support you in retirement. How are those two poor drudges going to spring for that £45,000-plus annual price tag and still feed their families?
Your kids will pay for your old age one way or another. They’ll either work like drays and be taxed into penury, or they’ll sacrifice their inheritance: they will not get your house. Maybe it’s better that they not get your house. See, you’re effectively spending their inheritance on your wonderfully (or not so wonderfully) long life. Besides, passing wealth to the next generation is not a human right. Money for nothing, by accident of birth, isn’t good for character anyway. You’re the kind of person who believes that.
Some consolation: if you were to choose — and you did — between being someone on whom others depend and being a burden, which role is more dignified? Hold your head high. You worked, you saved, you invested wisely. Now that investment can ensure that you leave this life as you lived it: owing no one, burdening no one. So pay as you live, pay as you go.