Health care costs eroding old people's wealth
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Your support makes all the difference.Thousands of young people expecting to inherit the family home may find their legacies wiped out by the cost of caring for elderly parents.
Growing numbers of infirm old people are selling homes to fund the cost of private residential care, and the problem is likely to worsen over the next 50 years.
Not only will children see an expected nest-egg disappear, but many will have to support parents and their own children. The squeeze on family finances threatens to become a 'serious source of conflict' across the generations as the social and economic pressures posed by an ageing population escalate.
The warning comes only a year after John Major, in his first speech to the Conservative Party conference as Prime Minister, trumpeted the marked rise in property ownership during the 1980s to more than two-thirds of all UK households, and spoke of his vision of 'wealth cascading through the generations'.
A Family Policy Studies Centre report says government policies on home ownership and care of the elderly are becoming increasingly difficult to reconcile. 'On the one hand people are encouraged to buy their own homes and view it as an investment that can be passed on to their children, but on the other an elderly person is expected to sell their house in order to pay the fees of residential and nursing home care,' it says.
Last year, the average house sale realised pounds 66,000. That would pay for the care of an elderly person for five years in a private nursing home and eight in a residential home. As property prices plummet during the recession, cash raised to pay for care is likely to run out even sooner.
Projections based on census data show the numbers aged 65 and over rising from 8.8 million last year to 11.6 million in 2051. The cost to taxpayers of supporting low-income pensioners in private residential care spiralled from about pounds 10m in 1979 to about pounds 2.5bn last year. Long-stay beds for the elderly in the National Health Service have virtually disappeared in the past decade. The report comes three days after the Labour-controlled Association of Metropolitan Authorities predicted a pounds 200m shortfall next year in the budget earmarked by the Department of Health for implementing its reorganisation of community care.
Francis McGlone, who carried out the research for the Family Policy Studies Centre, said: 'Elderly people are being placed in an impossible position. They may need the care, but they are reluctant to deprive their children of an inheritance for which they have worked all their lives.
'We need to re-examine our whole approach to the care of dependent old people to prevent care in the community turning to neglect.'
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