Retirement Income Alliance

The Care Conundrum

by Malcolm Small 01/03/2017


Recent events have brought the issue of care for the elderly back into focus, and particularly social care, delivered in the home, rather than residential care provided in a dedicated facility. The costs of both are substantial, with the fees for both being funded by the state, via local authorities, in up to two-thirds of cases. Budget pressures are distorting the market, with cash-strapped government, whether local or national, unable to meet the bills. In turn, care provider businesses such as nursing homes are seeing their business models destroyed under pressure from budgetary cuts, business rate increases, rising national minimum wages and potential restrictions in migration through Brexit.

The care system, such as it is, is uniquely reliant on intra-EU migration. I’m aware of UK nationals resident in Spain, for example, who fly back to the UK to provide a month’s domiciliary care at a time before returning for a two month break. They then fly back to the UK for another “shift”. This system provides continuity of relationships and care for the older person, which are demonstrably important in later life, and a worthwhile supplementary income for the Spanish resident – or Polish, or Romanian.

In terms of the Brexit discussions, it’s hard to overstate the care system’s reliance on European workers or, indeed, the healthcare system more widely. Evidence is already emerging of these workers returning home in the face of perceived hostility to Europe, whether imagined or real. People crave certainty; the current situation is anything but, and they are voting with their feet. This all makes for grim reading, not least for the elderly who have assets, and are terrified of seeing those assets all but consumed through an extended stay in residential care. It is estimated that between 1 in 2 and 1 in 3 people will need 6 months or more of care before they die.

Many will have personal experience of loved ones who have faced this situation. Older people not affected by dementia will often openly express their fear of this situation arising and the effect it will have on their estates. They are often anxious for money to be passed, not so much to their children, who may have made their own way in life, but to grandchildren, often millennials, for whom the future looks much harder, and who need a “helping hand”, perhaps to get on the residential property ladder. The cost of care can destroy these aspirations, causing the elderly additional distress, and stress, at a time when they should be coming to terms with their lives. Anyone who has dealt with a loved one in this situation will know how hard this can be.

So, what are the answers?

There are several, but they will require an open debate in UK society that I don’t really think is happening yet, and confrontation of some unpalatable truths. The first thing to recognise is that the current system is unsustainable and unaffordable without gigantic tax increases on the living, and the estates of the dead. Much more care needs to be provided by family members than is the case at the moment, although billions of pounds’ worth of care is already provided by family. Some specialised care, such as is needed in most dementia cases, will need to be provided in specialised facilities, although even here, the tradition in Mediterranean Europe is to manage this in the family home. We need to encourage thinking on this topic. We cannot afford to keep slinging money at a need which will only increase exponentially over coming decades. But as recent events have shown, it is an emotionally charged subject.

Malcolm's views are his own and do not constitute advice.