Private Health Insurance but use NHS?

We discovered a number of cases of older people who had serious illnesses, and some had heart surgery. What struck us was that although the people in some cases were paying several hundred pounds a month under a private health care plan, they had not used the private health care route to deal with their medical care.

They were not always able to articulate why they were still continuing to pay for private health care.

Are there any views on why people continue to pay for private health care that they might never use?

So what does anyone think of the government's idea of a levy on people when they die, or a 'death tax', supposedly to pay back any costs that may have been incurred looking after older people in care homes?

Here are my (personal) reactions. First, it removes any incentive for the older person to keep well and keep out of a care home. Second, if all care homes are state funded and provided, you can bet there will be no choice, and standards will fall, leading to more elder abuse and other bad conditions. Third, if children (adult) know they will lose £20K of their inheritance anyway, what incentive is there for them to help their parent stay at home ? they may well be tempted to stick Mother in a care home and let her rot.

Finally, what about people who die young - will the tax apply to them too? It's full of holes as an idea.

It would be much better to encourage, and support, people who want to stay in their own homes, and help their families to organise the necessary services, if there is no relative who can realistically help. In our research we met couples who had a parent of one of them living in the same house, or who provided support for an aged relative in some other ways. We also met one or two people who were caring for a spouse who had suffered a disabling condition.

Some of our older participants were already themselves receiving help from their children - whether financial or practical. However, we must not forget that not all older people in need of help actually have any children or other relatives to call upon.

Do give us your comments, whatever your point of view.

In analysing policy for this project, I have been struck by the way that references to 'Greedy Baby Boomers' are appearing in the media (see below for a link to one example advertising a new book by Conservative MP David Willetts).

The 'Pinch' - How the Baby Boomers Stole Their Children's Future
http://http://www.guardian.co.uk/books/2010/feb/07/the-pinch-david-willetts

There is a tendency in recent policy documents and political speeches to emphasise inter-generational differences in wealth distribution - for example the stress placed on housing equity held by those aged over 55, and discourses that emphasis the fact that Baby Boomers have benefited from access to final salary pensions, home-ownership and early retirement that will be increasingly unavailable to future generations.

Of course, by deflecting the blame for the plight of the young onto the older generation, it conceals the political and economic decisions that have contributed to this state of affairs. For example:

• The abolition of student grants
• Failure to invest in affordable housing (and selling off social housing)
• The privatisation of pensions and pension fund mismanagement scandals that have helped to generate new risks and future undercertainty around future income in retirement
• The failure to tackle the issue of funding for long-term care for several decades

And these are just for starters!

However, these discourses of intergenerational inequity have productive effects - for example they may be used to justify decisions to transfer funds to education and not long-term care.

What do you think?

Lynne

Better The Devil You Know?

Some interviewees have said that in their long marriages there has been an unfair distribution of money through the years between husband and wife but that they have decided to live with it.

Typical phrases used were “Because I don’t think this is the time of life to have major disagreements”, “Better the Devil you know” or it “Causes too much stress” seemed to sum up the dilemma.

Is this something that all couples do or is it peculiar to people married for a long time?Do we learn to live with unfairness just to keep the peace when we think the relationship is more important than the distribution of money?

Employment and older people

Many older people have been affected by the recession and financial crises not only in terms of the reduced income from savings accounts and shares, but also because of losing jobs or having their hours cut. For example, in our research, one of our participants worked as a domestic carer for a range of people (as she put it, aged from 4 to 104) and had found that because her clients had to pay themselves (even though the care was organised through social services) they were having to cut down on the hours they could afford to pay her for.

On Monday 25th Jan I attended the launch of 'Working better: the over 50s - the new work generation' which was held at Tate Modern by the EHRC (Equality and Human Rights Commission). It is undoubtedly true that even beyond the present recession, most older people are going to have to continue working for longer than in the past, mainly in order to generate enough income to fund their eventual retirements.

However, it appears that despite the best efforts of the EHRC and the various bodies such as Age Concern, TAEN (The Age and Employment Network) and the EFA (Employers' Forum on Age), there are still many influential people who hold that older workers should somehow 'give up' their jobs for the benefit of younger ones.

We are all sympathetic to the plight of younger people who are finding it hard at present to get their foot on the career ladder. Indeed I have 2 children myself who are in this position. However, many economists think it is a myth that if one group of the population are cut out of the workforce, jobs for others automatically become available (this is known as the 'lump of labour' fallacy). Instead, it seems likely that as an economy becomes more prosperous, jobs increase for all population groups.

But there is a danger that the idea that younger people should be favoured versus older ones, could be used to justify the continuation of the use of forced early retirement, and other forms of age discrimination in the workplace. No worker can keep up to date on new working methods, etc., if they are denied the training to do so, and this is one way in which age discrimination in the workplace can occur.

We need to recognise the contribution that each age group can and does make to the economy, not penalise one group to favour another.

Please comment, particularly if you have had any personal experience of issues like this.

National Savings Stamps

I have been thinking about the Government's recent drive to encourage financial education in schools and the use of Child Trust Funds as a way of stimulating a life-long savings habit. The idea of developing savings habits early in life is not new and Governments have tried this before. I wondered whether anyone had experience of saving via the old National Saving's Scheme stamps at school? If so, do you think that this made you a more prudent saver in later life?

Were there other schemes or influences that encouraged you to save as a child and/or young adult?

I would be really interested to hear about your experiences

Lynne

Cutbacks in the recession

A recent article in the Telegraph suggested that despite the recession, people are more likely to cut back on their pension savings rather than curb their spending on clothes or eating out - you will find the link to article and the organisation that produced the survey below

http://www.telegraph.co.uk/finance/personalfinance/pensions/6416142/New-clothes-more-important-than-pensions.html


I wonder whether this is an example of people adopting a 'devil may care' attitude as suggested in the article or, is it more likely that people are more wary of investing in financial products at the moment - especially in view of the very low interest rates and recent instability in financial markets?

What do you think?
Lynne

Age limits and disability benefits

I am a new member of the research team and I am looking at social policy around money and savings.

One of my longstanding research interests is social care and how it should be funded in future. It is a 'hot topic' at the moment and is likely to be a high profile issue in the run up to the 2010 election. You may have seen the news debates about the future funding arrangements for long term care. One of the issues that is being discussed is whether disability benefits that are currently available without a means test, should be added to the general social care funding pot. In the recent Government consultation paper, two main benefits were included (1) Disability Living Allowance for those aged under 65 years and (2) Attendance Allowance for the over 65's. The Government has just announced that it will not include Disability Living Allowance for people under 65 in these proposals but Attendance Allowance is still 'up for grabs' (see the link below). I would be very interested to hear from anyone who receives Attendance Allowance or who has a relative who does, to find out what you think about these proposals?

As the Government increasingly wants people to work longer (e.g. past 65 years) it is going to become harder to justify age differences in benefit entitlements. The age at which people are deemed to be 'working age adults' and 'people who are retired' will become much less clear cut in future. On the one hand, we have anti-age discrimination legislation that seeks to challenge artificial age limits in some areas of policy and others where a distinction is being made on the basis of age (typically 65). Do you think this is fair ?

http://careandsupport.direct.gov.uk/news/2009/10/health-secretary-clarifies-government-position-on-disability-benefits/

Lynne

Older people paying too much tax?

A report by the National Audit Office has just been published which says that a lot of older people pay too much tax. This happens often because older people may have several different sources of income, rather than one simple salary. For example, tax may be deducted at source from interest-bearing accounts and many people are unsure how to claim it back. They have estimated that 1.5 million older people have overpaid tax by an average of £171, although some older people may have underpaid tax. Completing a tax return is complicated enough no matter what age you are, and however simple your income. It is worth finding out if you might be overpaying tax. I have always found the tax people to be very helpful if you phone them. Alternatively there are some sources of tax advice for older people - we are trying to find out which might be genuinely useful.

The NAO report may be found at http://www.nao.org.uk/publications/0809/dealing_with_the_tax_obligatio.aspx

Dinah 23.10.09

Is 'Financial Capability' the solution?

I have attended two conferences this week where the focus was on building 'financial capability' in individuals by education and the provision of information as the solution to the increasing complexity of managing household finances.  The conferences were very different but many of the messages were similar.  The first was on financial exclusion from the mainstream and was run by the Runnymede Trust, and the second on pensions and pension reform, run by the Pensions Policy Institute.  At both, many of the speakers commented on how in today's world it is becoming more and more difficult for people with low or middle incomes to know what to do for the best with their money.  One of (or possibly the only) solution that many saw was to give more and more information to individuals.  While accurate and easy to access information is important, I struggle to see how this will help in many cases or with some fundamental problems.  It will only serve to highlight more risks, uncertainties and insecurities, and won't magic spare money for people on low incomes or whose savings are now giving no interest, or who have put their money into pensions and have now lost large chunks of their life savings because of the problems in capital markets and equities around the world.