Lost: low earners and the elderly care market February 19, 2008
Posted by western4uk in Demand, Deprivation, Epidemiology, Equity, Financial Management, Grey Literature, Health Economics, Health Needs, Life Expectancy, Older People, Poverty, Public Health, Social Exclusion.Tags: Financial Management, Grey Literature, Health Economics, Local Authorities, Older People, Social Care
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‘Lost: low earners and the elderly care market’, from the think tank the Resolution Foundation looks at low earners and how they fare in the elderly care system. It identifies that social care for older people rarely receives the political attention it should. The Government’s recent commitment to a Green Paper on social care provides the opportunity for elderly care to become centre stage. Theis report establishes how low earners fare in the elderly care system.
It identifies that:
- Low earners tend to be older than average, and more likely to own their own homes. They also hold disproportionately more of their wealth in housing assets (as opposed to liquid savings) than other income groups.
- Are less likely that higher earners to prepare financially for retirement through
pensions, and worry more than other income groups as to whether they will have sufficient assets to retire comfortably.
- Inclusion of housing assets when calculating care cost contributions is of critical importance to low earners – it renders the majority of them ineligible for subsidised care, and also most at risk of having to sell their homes or downsize in order to access their wealth to pay for care. This is in contrast to lower earners,who may not own their own homes and be eligible for subsidised care, and higher earners, who may have sufficient funds to pay for care from their liquid assets, such as savings or annuities, rather than their homes.
- Low earners feel the system to be unfair – in the very low level of means testing benchmarks which excludes the majority of low earners from any state funded care; in the inclusion of housing assets which penalises those who have saved
Key messages are:
- There is acceptance that increased elderly care costs cannot be met by the government alone. Low earners still believe only the very wealthy should pay for their care costs, and that the majority of people should receive government funded care or only make a small contribution.
- The number of self funders – i.e. those who either wholly or partially pay for their elderly care – is rising, and will continue to do so, because local authorities are adjusting their eligibility criteria so that only those with greater care needs are eligible for free home or residential care, leaving those with “lesser needs” (which are now nonetheless significant) to fund themselves, regardless of income.
- For those who cannot afford to self-fund formal care – which is likely to be a more common situation amongst low earners – informal care (i.e. care provided by friends or family free of charge) is crucially important. Estimates suggest that 70 per cent of the care provided in England and Wales is currently delivered by informal carers. Demography points to the fact that the numbers of low earners reaching an age where elderly care is required will increase substantially in the next 5 to 10 years, yet the increasing number of elderly living alone, not marrying and not having children will mean there will be fewer children and relatives for older people to rely on to provide them with informal care
- Finally, low earners are also more likely to be carers of relatives than the rest of the population. The age profile of this group, combined with these factors, suggests that a significant proportion of low earners may be shouldering a dual burden – they may be caring for their elderly parents, but also still supporting (financially and otherwise) their own children. This “squeezed” generation phenomenon, which affects women in particular, will be a significant factor affecting their quality of life, but may also have a longer lasting, intergenerational impact – people who give up work to care for relatives will not be contributing to their pensions.
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