< Go Back The Ageing Population of Britain Background
One issue all political parties appear to be agreed on is that Britain’s ageing population is a time bomb waiting to go off, specifically in terms of how we are going to be cared for. Where they don’t necessarily agree, is how this will be achieved.
In 2007, the number of people in Britain aged over 65 outnumbered the number of people under 16 for the first time.
The projected increase in the number of people aged 65 in Britain by 2032 is expected to rise by 60%.
In India, the percentage of the population over 60 was 8%. In Britain this was 21.8%
By contrast the percentage of the population of 15 or under in India is currently about 30% whilst in Britain it is 19%.
For every pensioner in Britain today there are currently 4 people working. By 2035 this is expected to fall to 2.5 and by 2050 to just 2.
In 1901 there were just over 60,000 people aged over 85. Today there are 1.5m and it has been said that a child borne is these times can reasonably expect to reach 100. The one major issue that might conspire against this is the increased prevalence of obesity.
Commission on Funding of Care and Support
In July last year, the Commission led by Andrew Dilnot, an economist, published its report which found:
‘’Our system of funding of care and support is not fit for purpose, and has desperately needed reform for many years’’
The Government agreed in its ‘Care for our Future’ White Paper published this July.
Last year the Government spent about £8b a year on services for the elderly and it was stated at their conference last week that 8 out 10 of us will require care of some form in the future.
In Commission’s principle recommendation was that to protect people from extreme care costs, capping the lifetime contribution to adult social care costs that any individual needs to make at between £25,000 and £50,000 with £35,000 being an appropriate and fair figure.
Recognising that not everyone would be able to afford such a personable contribution, it recommended that means tested support should continue for those of lower means, and the asset threshold for those in residential care beyond which no means tested help is given should rise from £23,500 to £100,000.
The estimated cost of setting the bar at £35,000 as a life time contribution was estimated by the Commission at £1.7b
At the Conference, The Right Honourable Jeremy Hunt, the Health Secretary, dashed any hopes of early reform of social care funding by declaring the costs as unaffordable, but would nevertheless introduce a cap on individual care costs ‘’as soon as we are able’’. Ministers are said to accept the cap but the Treasury is said to be blocking the go-ahead.
Relevance for Will Writers
Whilst this is all very interesting, what does it mean for those trying to protect our clients’ assets and to help them plan for the future - but without (I hasten to add) straying into pure financial advice?
Well, more and more people are concerned about the rising costs of community care charges if they found themselves alone and with specialist medical needs. Even those with grown-up children who, for many reasons (for example, ethnical ideals), would never wish for their parents to be taken into a care home, might find that the medical supervision required is beyond the capabilities of a well-intentioned family carer.
We already talk to clients about the prospect of the means test exercise that could ensue were the decision be made that an individual needed to go into a home, and we probably say that the irony or reality for some is that the local authority may get most of their estate long before HMRC does.
For clients of a certain age, we should probably be mentioning what an appropriately arranged Will could do for them in terms of shielding some of their assets from potential care charges, in every case. Not because we want to flog them a more expensive Will but because it is important that they have some understanding of the realities of our population and what this could mean to them.
The many schemes out there where a person puts their home into trust whilst they are still alive in an attempt to avoid care home costs are frowned upon by commentators such as STEP (Society of Trust and Estate Practitioners) and ‘Which?’ and are something that, for reasons of shielding inheritance from community care costs only, is not offered by TWB. Mainly because, in many cases, the council would argue that avoidance of care home fees was the ultimate goal and the scheme would not work.
What we would suggest are the inclusion of property life interests which are reasonably cost effective and, if suitable to clients with regard to the other aspects of their circumstances, is something we would advise them to do.
The inclusion of this suggestion in our meetings with clients is sensible in all respects.