Another doom and gloom France is stuffed report

[vivienz]

There is a huge amount of press spin on the truisms about so-called 'skiing' holidays, Eurotrash.  With property prices as they are in the UK, the majority of people hold the majority of their 'wealth' in their homes which isn't in a form that they can easily spend, or at least not without incurring quite a bit of expense to access and many are reluctant to do this.  Ironically, if they do smoke and booze, they are theoretically reducing their life expectancy, so spending less over their shorter lifetimes and so leaving more to their kids than a 'healthy' elderly person who has to eke their  money out to their 100th birthday or beyond!

[NormanH]

With property prices as they are in the UK, the majority of people hold

the majority of their 'wealth' in their homes which isn't in a form that

they can easily spend.

I) this is a major problem for the economy as it reduces consumption and therefore employment.

2) there is no justification for people sitting on 'wealth' to expect the rest of us to pay for their care so that they can pass that wealth on to  children who have done nothing to earn  it and have avoided paying for their parent's care.

Compulsory sale of property of the those in need of  care, and the subsequent  injection of the money  into the economy via  payments for  healthcare  would solve both these points.

Yet the Tories are going in the opposite direction [:-))]

[vivienz]

Compulsory sale of property is effectively already in place, NormanH.  If a single person has to go into permanent care and they had a property, the property will be included as part of their assets that are available to them in order to fund their care.  If it takes a long time to sell the property, the local authority will pay for the care but put a charge on the house to recover the money paid as soon as it's sold.  The house won't be sold, however, if it is a couple and one of them remains in the home, although half of all other assets and income will be counted towards care costs.

[YCCMB]

[quote user="NormanH"]With property prices as they are in the UK, the majority of people hold

the majority of their 'wealth' in their homes which isn't in a form that

they can easily spend.

I) this is a major problem for the economy as it reduces consumption and therefore employment.

2) there is no justification for people sitting on 'wealth' to expect the rest of us to pay for their care so that they can pass that wealth on to  children who have done nothing to earn  it and have avoided paying for their parent's care.

Compulsory sale of property of the those in need of  care, and the subsequent  injection of the money  into the economy via  payments for  healthcare  would solve both these points.

Yet the Tories are going in the opposite direction [:-))]

[/quote]

And again, it appears, it;s OK to penalise people who have made some effort to save, even if that saving is in the form of purchasing property...whilst it's fine for people who have no assets (and many people who have no assets are in that position through having simply spent or liquidated them) to be taken care of by the state, free of charge.

What incentive IS there for people to save money (in whatever form) if they're then going to be mugged for it, when people with no assets can benefit from free help?

Not everyone who has material assets is super-rich. Even some relatively poor people have, for example, more than one property.

[EuroTrash]

Why are they being penalised, or mugged?

The incentive should be, that they feel it's right to take responsibility for themselves as far as they can, and not 'cast their problems on society'. That's how people used to look at it three or four generations back. If that's what you've saved up for, and when the time comes you're able to do it, then it's mission accomplished and you can go to meet your maker with a clear conscience. Being penalised or mugged doesn't come into it.

However if the only reason they saved up was to hand it on to their kids, that's no more beneficial to society/the state than if they'd spent it all on themselves, so why should there be any incentive for them to do that?

It's fine saying that because some people get taken care of by the state, everybody should - but where's the money going to come from if everybody takes out more than they put in? The cost of a few years in a nursing home must come to far more than the average person pays in NICs over a working life.

Being poor means having neither cash nor assets. If you have a lot of material assets you may not be cash rich but you are asset rich. And if they're assets that can be turned into cash then you are being cash-poor from choice.

[DraytonBoy]

The problem many people face is that the pension rules etc keep changing so it's virtually impossible to plan for retirement with any certainty. It's even worse for expats with assets or income in the UK as they are seen as fair game to tax more which I think will lead many to return thereby becoming a burden on the state.

[YCCMB]

If as you describe it, Euroteash, when the time comes, an individual is able to pay for their own care, the words you use are words and sentiments with which I totally concur. If, however, we are talking about situations where an elderly person is "put in a home" and then their real home is - as is being suggested-compulsorily seized as an asset and the funds so generated are used outwith their control to fund their care, I equate that to being mugged. Who decides the value of the property? Who administers the funds? Who controls the payments for the care received? Who, in other words, controls the situation?

[NormanH]

In France they might well be 'sous tutelle' with those things being adminstered by someone who was disinterested as opposed to the family who want to preserve their heritage.

If 'saving' (and that is often a word that hides the fact that property or wealth was inherited, not in fact anything that the individual has done of any merit) is for a 'rainy day', then needing care in old age is a good example of a rainy day..

Take two brothers, William and Harry.  William is the elder son and inherits two small terrace houses, one of which he rents at a market rate to Harry.

In their 80s, they both need to go into a home.

William who has benefited all his life from the income on the houses he didn't have to do anything to own now has two places each worth 150k

Harry has always had to pay rent and so could never acquire a house of his own.

Yet William's son expects the state to pay for his father's care, so he can pocket the loot for which he has never raised a finger...

[DraytonBoy]

Take two brothers, William and Harry. William buys a house and Harry rents. William puts money away every month for retirement whilst Harry spends any spare cash on holidays and living it up. At 70 they both have to go into retirement homes. William's house is sold to pay for his care whilst the state picks up the tab for Harry.

Who's the mug?

[vivienz]

Or alternatively, William owns only his own home whereas Harry has always rented and had surplus income that he has saved and invested.

In their 80s, both William and Harry enter a care home. Harry's investments are clearly going to be used to fund his care fees, along with whatever income he has. Why should William's chosen form of saving (his house) have a protected status compared to those of Harry?

[DraytonBoy]

The examples I suggested have actually happened to two sets of relatives in the UK only morally worse in one case.

Wife's grandparents sold their bungalow in the 70's and moved into council accommodation. They spent the next few years frittering away the sale proceeds on holidays and cars. When the husband died the wife was moved into brand new sheltered housing and then finally into a retirement home (paid for by the state) where she died.

For the last twenty years of her life the wife lived in comfortable subsidised housing and with pension top-ups her weekly income was nearly £200.

[idun]

And this argument about the money, well I know how my Dad feels about this, he's 90.

He started work at 13, he shouldn't have, but being born at the end of August, started work as soon as school broke up and they didn't bother then. He worked all this life, sometimes hard work, did his time in the army, some of it dangerous, and did getting on for 2 years in Gaza, some of that also dangerous.

He would spend every last penny he had now if he had the energy so that he would be 'a charge'. From a socialist who had me going round the doors with him when I was a young child, he is right wing now. As it is, after a life of being careful with his money, he has some and it makes him livid when he sees people waltzing into the country and getting anything at all. It makes his blood boil when he sees people cheating the system too and no one ever does anything that he can see.

And he hates Cameron with a passion, and I know has written to him and told him what he thinks of him.

I'm just mentioning how he feels, and maybe many other old people feel like this too, perhaps, but maybe they would not say it.

Me, I suppose I lived in France too long and much rubbed off, even though I shall never be french, I 'get' many french things.

No system will be completely fair, ever, it is an impossibility. However, when one is giving other people's money away, which is in fact what the government does when it decides how to spend 'our' money, they should be very careful and make every bit of the system as honest and fraud free as possible and they actually don't. Was it ever easier to check up on folks? 

[lindal1000]

Having no heirs or children who could be chased up for my care.. then I am aiming to liquidate as many of my assets as I can before I get to the point of needing care and to enjoy every last penny. I sort of think it might be better to be in the position of having no money to fund a care home.. at least then they will strive to keep you at home as long as possible as it's ultimately cheaper.

[woolybanana]

Especially as their is much grey area as to what should and should not be paid for, which certain local councils take advantage of to shove the cost onto the old person.

One major problem is that care homes are often bought on huge loans or mortgages which put up their costs inordinately. A problem to be addressed, but how?

I think that people should be able to buy a bond worth, a set amount which could be cashed late in life and used for their care, worth say £100,000 pounds.

But the present form of property confiscation is not on.

[idun]

Surely the same property 'confiscation' happens in France too. A good friend's mother had to sell her flat to pay for her care. When this lady's dementia started she stayed with her daughter, but in the end, they dare not leave her alone and so she had to go into care, hence the sale.

Another friend (also in France) has her mother living with her, her mother also has dementia. My friend's siblings won't take the old lady on, nor will they give permission for their mother's house to be sold, although it will have to be in the end if she goes into care and from what I've been told, that will be quite soon.

[vivienz]

A form of insurance specifically for long term care funding was introduced about 10 years ago, but was withdrawn after only about 2 or 3 years because the take-up was so poor.

In the long run, though, I think it's likely that there will be some form of compulsory insurance against long term care costs so that those who prefer the 'spend it all and let the state pay for my care' option have made some contribution towards their care costs. It will go the same way that pensions have gone in the UK now, where contributions towards non public sector workplace pensions are compulsory for the employer and pretty close to compulsory for the employee.

Sadly, most developed economies (and that includes the likes of Japan) all have enormous problems looming with funding the care of their elderly and it's not unique to the UK, France or even just western Europe.