Tax the old

Death and Taxes

We are all facing a time-bomb. Populations across the globe are ageing. And the aged need care, and that costs money.

Not everyone can afford that care and governments are left searching for solutions. European leaders have shown vision by funding research into frailty and age-related disease like diabetes through projects like MID-Frail and Frailomic using Horizon 2020. Sadly, MPs in the UK don't have the same vision. The best idea to emerge from two influential House of Common's committees is to introduce a new tax - this time for the over-40s. Retired people should also be made to pay it if they have lucrative pensions or investments,

The contribution - dubbed a social care premium by MPs - could then be used to ensure everyone who needs support in their old age gets it. These suggestions have emerged as ministers are considering how to reform social care. Only the poorest currently get help towards the cost of care, whether it is provided in people's homes or in a care home. However, questions are being asked about the quality of care being offered. Anyone with any savings have to pay for care themselves - with one in 10 facing lifetime costs of more than £100,000.

Increasingly people are relying on family and friends or go without any care at all, which includes everything from help with washing and dressing to support in taking medications. It seems that ageing in the modern world may be bleak for all but the wealthiest.

Polling carried out by Ipsos Mori as part of the work done by the four leading health think-tanks to mark the 70th birthday of the NHS showed only 15% of people thought the current system was fair. There was mixed desire for a new tax - only one in four people were in favour of using wealth tied up in people's houses. The MPs on the Housing, Communities and Local Government and Health and Social Care committees said changes were long overdue.

It is clear that the squeeze on council budgets following 'austerity' coupled with the unavoidable ageing population sees the system already close to breaking point. Any solution needs to be radical. But there is little slack left in the budgets of the stretched middle. Poor insight has the MPs suggesting that employers should also contribute to the social care premium. They have at least understood that more is needed and they have accepted that it could be topped up by an extra levy on inheritance tax on the wealthiest estates.

The MPs believe that a simplistic fiscal approach will see everyone getting care paid for - although those in care homes would still have to contribute towards their accommodation costs. The committees do not say how much should be levied, acknowledging there would need to be a full review on how much money the system needs. 

It was also suggested that any money raised could be used to support the wider care system for younger adults with disabilities, which forms part of the overall social care system - another area where UK leaders have been found to be lacking in ideas. As always happens when governments try to tax and spend their way out of difficult problems, they said a degree of "intergenerational fairness" was needed, given the under-40s as a whole were more likely to be struggling with housing, employment and the cost of living than older generations.

Currently, the care provided by councils costs £20bn a year - less than a fifth of the NHS budget. By comparison, funding research into better ways to provide directed care costs a fraction. Perhaps it is time to redirect the focus of funding towards research into the elderly. Although it may not be as sexy as other areas of research it is a future that most of us are facing.