David Behrens: Care and pensions failure leaves retirement a grim prospect

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It took a report from Age UK on Wednesday to confirm what many of us have known for some time: this is no country in which to grow old.

We have known it because we have for years watched the value of our pensions plummet headlong, along with any expectations we may once have harboured of a comfortable retirement. Those of us in the private sector especially can look forward to an annual income of less than £3,000 at age 65, based on the amount in an average pot.

Just to put that into perspective, it’s around £57 a week – barely enough for food, let alone holidays.

Only those who have amassed three-quarters of a million in their pension fund can expect to receive anything remotely approaching the £27,000 that constitutes the UK’s average salary.

Those in the public sector who benefitted from final salary pension schemes can expect to come out of the workplace better off, but none of today’s retirees is going to reap the benefits of the deals that were on offer to anyone 10 or 20 years their senior. That retirement cruise has sailed.

This week’s analysis, concluding that England had fallen behind the other European nations in attempting to care for its increasingly ageing population, rubbed salt into the wounds. The elderly here, it said, were unfairly carrying the burden of expensive social care and getting a worse service than pensioners elsewhere.

The authors were alluding to our system of means-tested care funding which has remained in place, largely unchanged, through two Government consultations, two official Commissions, five Green or White Papers and one Act of Parliament.

It requires that anyone with savings or assets above £23,250 must pay all the costs of their long-term care. That means, effectively, everyone who owns a house.

The figure is significant because it is set low enough to capture everyone who has also fallen victim to the pensions collapse. It consigns millions of us not only to an old age of penury but also to the prospect of having to sell our homes if we’re unfortunate enough to fall ill.

That is not the case elsewhere. Germany, France and Japan have devised either means tests with gradual entry slopes or rejected them altogether, and capped the level of individual contributions. And France and Japan, unlike England, do not factor into their figures the informal care which is provided freely by family members.

It is no wonder that the report’s authors concluded that the social care system in the UK is in crisis.

There are, of course, no easy solutions; Germany and Japan are not immune from financial pressures, either – yet the fact that England compares so badly is proof if any were needed that neither this Government nor any previous one has properly grasped what is at stake.

The report is timely, because as we speak, the terms of yet another consultation paper are being horse-traded in the corridors of Whitehall. The Government says it will be published in the autumn and will set out its plans to make the social care system “sustainable for the future”.

But will it really? We’re talking here about a Government whose future is measured by the hour, not the year, and whose leader appears not to be on speaking terms with her Chancellor.

If it is to be anything other than just another wasted opportunity, the paper will need to address three questions: should basic, universal social care be provided free at the point of use; should the cost of that care be borne by the state or the recipients; and to what extent should those recipients be progressively means-tested?

France weighed the same considerations a decade and a half ago, and reformed its long-term care system by introducing a universal social insurance scheme.

Here, though, we are nowhere near the sort of political consensus that would be necessary to see through such major surgery on the sacred cow that is our National Health Service. For that reason, it’s hard to imagine any outcome other than the autumn consultation vaporising into yet more hot air.

Security after work ought to be a given in any developed country. In ours right now, a long retirement is becoming more a curse than a blessing.