Morning Line: financial crisis isn’t the problem – it's expensive old people

Well nobody's paying for this "old" person but I'm sure paying for the easy-come easy-go debts of "young" people!

Here we go again

You work and pay in massive amounts of tax then become a criminal for not conveniently dying off and saving the State from having to pay pension.

As for raising the retirement age and working past 65 where is all this work supposed to be?

Then those retirees who do manage to carry on working are accused of being selfish and denying young people, who can't get jobs, the chance to work.

As the Armiglian Major Cow said:

"Excuse me while I go I shoot myself - don't worry sir, I'll be very humane!

I think not Mr Marshall!

Pretty much all rubbish:

The problem is leveraging, and now deleveraging.

In leveraging times every £1 is multiplied by "hot-air" to the tune of say 10.

All the city types go and spend their (relatively small) share of the "hot air" 9 on Ferrari's Champagne and whatever.

When they decide to "deleverage" everyone has to pay, particuarly the great "uninformed" like you and me!. And to make it worse most of us never got much of the "hot air" 9 into our pension pots.

http://www.accountingweb.co.uk/blogs/jefflcbba/mad-lemming/deleveraging-storm-blowing-across-atlantic

it is the expense of educating the young - I have put 7 members of the family, children, grandchildren and step children through university - I would dearly love to have some of that money now -

Amazing to lump people together as if they were a bunch of sausages -

Imagine to say I are too expensive after paying for all that education - raising two generations- Running a charity - being a university teacher -

Basically - and importantly

This highlights the problem of calculating cost that is not unconnected with the false accounting that is being used to try to figure out how to pay for university education -cost centre accounting is not the way to go - if the Labour party has any sense it will try to rethink social cost and investment in people skills.

The welfare of the country depends on that -

Constance Blackwell

The problem is threefold longevity, a pension deficit & some bad luck re demographics.

We all live longer & the last 4 years of our life are the most expensive medically. If we all lived healthy lives & then dropped dead that would be fine, but we don't . Plus we keep up coming with new drugs & new surgical techniques to help us live longer although not necessarily in full health.

All public sector & some private sector pensions are underfunded. The cost of an individuals fully funded pension(assuming 60% of final salary) requires contributions of approx 30-40% of an employees salary over their working life &this figure will only go up if we maintain the current pension age and individuals live longer.

Finally there are great deal more babyboomers than Gen X & Y who come after them which means unless they keep working their are less individuals to pay an increasing tax burden for public sector pensions and the NHS.

Suggesting that "older" workers crowd out younger workers from the labour market is balderdash & has been rebutted by economists for years. It's called "The Lump of Labour Fallacy". Individuals who espouse this view believe their is a fixed amount of work in the economy. For instance women's increasing participation in the workforce has created demands for other jobs - e.g. more cleaners, childcare are the most obvious, but also work often demands different clothes and needs e.g. after school clubs etc. The other problem with this argument is that it assumes individuals are easily interchangeable. I am a qualified accountant, an 18 year old straight out of school can't replace me, nor could replace a newly retired 60 year old doctor.

Like most future gazing it's done from the perspective of what we can do now.

Major savings can (and are) being made by delaying the time when old people need care. Eg If granny can live on her own for another year it saves a fortune. So think about remote monitoring systems, new cures for age related diseases etc and as technology improves we will see things like the rise of domestic robots to help with care work . We will all die but the world we live in will change with it and analyses like this one will be shown to be inaccurate.

ps remember the Demographic timebomb of the 1980's? there wouldn't be enough young people to do all the work so we will all have to work for longer.

Obviously the answer is euthanasia at 75. Hope they don't find out too soon!

Ted

Good idea:

http://www.accountingweb.co.uk/blogs/jefflcbba/mad-lemming/and-i-am-voting-for5-party-postpones-retirement

Rgds

Warren Buffett

The BIGGEST FISCAL CHALLENGE IS NOT THE OLDER GENERATION.

We all get old and frail that we cannot help that is normal. What we can do is stop wasting money on aid to other countries and illegal immigrants. Stop giving support for self inflicted illnesses drugs, drunks and all the other low life rubbish that we seem to love to give money too. Also all people selling or distributing drugs should have every penny of their money seized and sentenced to twenty years HARD labour. We should also have prison reform to make it very unattractive for criminals, not the drugs holiday camp it is now. We should also bring back hanging for certain categories of murder. Also let’s get rid of another burden the EU more billions washed down the drain. So in one swoop I have solved all our fiscal problems. That is of course if we were living in a sensible logical society but we are not. THE LUNATICS HAVE WELL AND TRULY TAKEN OVER THE ASYLUM UNFORTUNATELY!!

I totally agree with Mr Tonks - so much of our money wasted on europe and overseas aid and there is never enough money for our own needs. If the conributions we paid were invested for us as individuals rather than being spent now there would not be an issue with getting older. Why not give us the choice of being self sufficient and paying no tax or NI and paying for what we use. I would be £780 a month better off and could easily take care of my own needs at retirement after another 28 years of work.

I won't get involved in the cost of the EU debate but think on one thing, before the EU we had decades of European wars. Since then nothing just talk and hot air but it's a damn site cheaper than wars.

bravo - finally someone that remembers what really happened in the last 500 years!

London after the 2nd world war was a sad dark dirty place - and cold my god it was cold and foggy - in Germany - on my first trip in 1955 - yes I know I am too old to live - on the train I was taking with college friends a German woman with a southern american accent was begging - her father sold her to a GI for 6 bags of coal and she was left with three children - something out of Mother Courage - - in Grenoble people were fighting each other on the street - because some had collaborated others not - this 10 years after the war -

think on Europe - and be glad your children will not experience such a war -

sorry to be alive to remember -

I take your point Dennis and cannot comment on the decades of European wars but can recall the falklands war, the first war in iraq, the second war in iraq and now the war in afghanistan. The wars have not stopped they have just moved elsewhere and they are just as expensive and the contribution europe makes compared to the uk is minimal - there is no back up from europe. Looking at all the atrocities and wars worldwide in my own lifetime, they still rage on as it is human nature to kill each other for personal gain. My grandparents contibuted to the second world war, my grandfather lost an eye and had a limp for the rest of his life - his reward was the taking of the majority of his private pension by way of taxation. Despite working hard all their lives without claiming a penny, they passed in poverty and were left with £8 a month out of a private pension of £60 a month 18 years earlier.

What a fatuous comment from the IMF, if indeed they said it. The money spent by government on old age is but one factor in the nation's outgoings. If one wishes to trivialise the argument still further, what of the client constituency that Mr Brown created in his term of government, with its manifold non-productive jobs and monies for skivers. Another thought - as an eighty year old - why are the elderly often portrayed by such commentators as some species other than their own.

Another instalment in the war of the generations, doubtless designed to soften us up for the theft of our pensions. (Mine, BTW, is fully funded, but will still be hit by this govt's proposal to limit indexation to the discredited CPI rather than the more realistic RPI).

Chris Marshall is correct that 'Our health spending is less than other large European economies and almost half as much as the 16% apportioned for health care in the US' but the big rise over past decade is only a partial catchup to compensate for lagging standards compared with Europe. It isn't directly related to the cost of care for the elderly so much as better pay and conditions for health service workers, more modern hospitals, more state-of-the art facilities, more expensive drugs. And, here in the south-east, still we have to resport to private medicine to treat even life-threatening illnesses.

Costs of care for the elderly may rise, but remember that most people never go into residential care but die at home or in hospital soon after admission. None of my forebears or my wife's ever went into residential care - most died in their 80s or 90s after just a few days in hospital, having required only modest amounts of medical care in their last years. More knowledgeable and health-conscious people, living healthier lives, are likely to live longer and more productive lives beyond the expectations of their parents and grandparents. Technology will continue to depreciate the value of manual labour, and more elderly folk will be able to continue to be economically active for longer.

The geriatric timebomb is a myth. Wealthy societies will be based on knowledge economies, but UK public policies have regressed from facilitating life-long learning. That's much more worrying than an ageing population.

As one of the current lot I have had to sell my home to pay for my Care Home Funding .hope you have the same opinion when your turn comes Mr Marshall

When I was younger I used to think that old people had always been old, then I started to realise that they were just young people who had been around for longer. None of us are immune.

Like many other mid 50s, as I am, and like many other much younger people, I work, pay tax, save, vote and take part in and care about the society I live in. I have been made redundant, I have been self-employed, I have made the best provision I can afford for myself, my two children and my wider family. What governments don't want to even mention is their inability to break out of the liberal consensus, lowest-common-denominator vote hunt that makes us pay for the lazy, feckless, ill-educated [despite the miilions poured into education], unhealthy [despite the even greater millions fire-hosed into the NHS], disengaged group of our population that is growing daily [despite the untold billions spent on the salariat, client group that is social services]. That's before we even think about their addressing issues like immigration. I have a gun [legal] and I know how to use it. I will be teaching my twelve year old daughter how to use one too - I fully expect her to need it if she stays in the UK when she is an adult. I keep trying to identify the point at which the younger me changed from being a caring, sharing, concerned person to someone who just wants to get through the rest of his life paying minimal tax, consuming as much services as I need, in the hope that they are there when I need them, and persuading my children that there are better opportunities in other places than here..

In the latter, I remain optimistic.

If you pay the average £24000 pa to be looked after in a care-home - that is £24,000 pa less that is left to the next generation.

If care-homes were free (ie paid thru NHI Contributions), then this money would go to those younger people, instead of to the greedy owners of the Care Homes. (How much does the average Care Home owner take home? Quite a lot compared with the minimum wage he pays his carers?)

If the Care Homes were nationalised, the money for these fees could be left in Wills for the younger people who are going to have to live on very low pensions.

To Anonymous1, I have never been an advocate of nationalisation of anything after surviving the 1970s and the real dictatorship of the proletariat. However, you are right in raising the issue of care homes. My father is in permanent care [self-inflicted Korsakoff's Syndrome - he fits into the category I was decrying above]. His care is very, very expensive, and is delivered by whatever ethnicity or nationality is cheapest as time goes by, to maintain the share price of the company that owns the care home. I'm not arguing against private sector provision in that area of course, as I saw the same thing in the NHS care he received earlier in his condition. What we should be looking at is proper hypothecated taxation that does not allow the caprice of any government to change the rules about how the money is used. I am forced to pay tax but I am not rich enough to pay an accountancy firm to do my tax avoidance. I would be much less resentful about that, if I knew that the tax that went to healthcare and pensions were ring-fenced, and in proportion to who paid what. My father paid the square root of nothing for his, given his lifestyle, but I am happy that I am able to pick up the tab. We have become far too touchy-feely about this. There are the deserving poor [and it depends how you define that term, and it's all relative - I'm not sure that there are many people these days with an outside toilet, cold water only and parents and kids sleeping in the same small room, as I did as a child] and that's why we have a benefits system. We have the undeserving poor - insert your own examples - and that's why governments, and the current one is no exception, are not likely to do away with universal benefits such as child allowance. If the great, lumpen, middle-class that is trackable and cannot avoid paying more than its share stops seeing at least some return on its contribution, it will, eventually, turn on the indistinguishable politicians our version of democracy throws up to govern us.

Anonymous1 may have forgotten about IHT, which will catch more and more of us ordinary middle classes in its maw - I would prefer to leave my daughter the debt of a mortgage, to ensure that she has a house, than to pay any government inheritance tax.

Meanwhile, back at hypothecation. Well, it's anathema to the civil service that has to deliver whatever hare-brained policies each government comes up with. This is understandable, given how flexible any senior civil servant has to be. It's also anathema to those successive governments that do not wish to be bound bound by prior decisions of equally-democratically elected governments. So, we get general taxation from the TV tax to the Road Tax, to the National Insurance Tax, to the Fuel Escalator Tax, to the Flying Tax to the ... I'm sure you get the picture.

Ian Rosebury & Alan Tonks are spot on in 2 very differnt summarys of their views of the expensive old people debate.

It has to be said the Great has gone from Britain it is for this reason other nationalities sre laughing at us all I am convinced that people in not so developed parts of Europe , Africa & Asia on arrival thinkl it is Christmas.

I think the last time I saw figures it was 400K people left the Uk last year and have done for many years for a better life these sold their houses took their middle income & professional qualifications abroad no longer putting money into our system at the same time non skilled immigration rose so they will neeed support..

I will give my view no more wars cap immigratrion very skilled only seek dole cheats theres your billions perhaps we wont have to make the elderly feel guilty of being old or ill.

By the way I am 45 in perfect health.

It is the feckless young having children to be paid for by the state and never intending to really work or make a proper financial contribution to society who are wrecking our way of life. But they always seem to have enough to spend in the pub (at lease where I live ...

My,Oh, My........such BILE on all sides! Perhaps we should all stop pointing fingers and start pulling together. I consider myself fortunate to have made it through 60+ years, never unemployed, always grafting for EVERYTHING I got, but I'm not resentful.......just prepared to continue to do my bit, even if it does start to get tougher during an austere period.

Codswallop! What a rubbish story. You work all your life paying your way and for all the free loaders on the way. Only to be slated because you have lived to long and you are now a drag on the economy.

Lets stop all overseas aid, free housing to single mums, and everyone from outside the UK.

The person/persons who put this report together should be stoned!

And there was me thinking that Citywire readers would be thinking individuals a cut above the general population. Might as well forget the Financial Times and start reading the Dail Mail.