MARKET COMMENT
Who Will Look After You When You're Old?

By David Kuo (TMFDragon)
October 1, 2001

Carburton Street, London -- Who should bear the responsibility of looking after the elderly in our society? A free market approach would suggest that we should prepare for our own old age when we are still young and able to work. This means we should be putting aside money into our pensions and other saving schemes that would allow us to draw on those reserves when we need them later on in our retirement. But life never quite works out the way we plan, and the state will always need to step in and provide a safety net for those who are disadvantaged and unable to care for themselves.

This morning, the National Health Service said it would help thousands of people pay for their nursing care. Residents of nursing homes will be assessed by their clinical needs and not their income. The contribution from the state will be divided into three bands which amount to £35, £70 or £110 per week. Those who have needs above the highest band will receive the care they need. But the state's contribution relates only to nursing care -- that is, the cost of work done by state registered nurses. Ancillary work, which includes bathing and feeding, is not covered under this new initiative. The NHS also unveiled another new initiative known as deferred payment to prevent people having to sell their homes to fund nursing or residential care.

Baroness Thatcher once said "We want a society where people are free to make choices, to make mistakes, to be generous and compassionate. This is what we mean by a moral society, not a society where the state is responsible for everything, and no one is responsible for the state." The free nursing care plan is a compromise between the state providing completely free care and the existing means-tested arrangement. It falls short of the recommendations of the Royal Commission on Long Term Care, which called for completely free care, but this is no bad thing. It places an onus on each of us to provide for our own old age but at the same time taxpayers will also bear some of the responsibility.

Pensions discussion board