Do Tories plan a raid on your pension fund?

Thank you to Dave Sunman, Pastor at Morden Park Baptist Church, for hosting the hustings last Thursday (29th April).   These events provide an opportunity to debate issues, and Thursday’s was no exception – we covered a wide range of topics.

One issue that arose was  how to manage increasing demands for adult social care.  I made the point that it was unfortunate that the Conservatives had withdrawn from cross-party discussion on the issue, since we (the Lib Dems) felt that given the scale of this issue, cross-party discussions were really the only way forward.

In interesting contribution from Mitcham and Morden’s Conservative candidate concerned the funding of their proposal for older people to purchase insurance against future nursing home needs.  Their original statement merely said that £8,000 would be paid per person into an insurance plan which would pay out to cover residential care needs in the event they are required.

Back in March, Norman Lamb, the Lib Dem Shadow Health Secretary, released figures which showed that 63% of couple households do not have enough non-housing assets to cover the insurance premium – a couple household would have to find £16,000 to cover the insurance.  The numbers of single person households who do not have enough non-housing assets are of a similar level – 71% for women and 65% for men.   So, what this would mean is that people who don’t have enough cash (or assets other than the house to sell to get the cash) would have to sell their home in order to obtain the £8,000 or for a couple, £16,000 cash they needed to buy the Tory insurance premium.

Ms Hampton, responding to this discussion and the question of how people would pay  this £8,000 insurance premium, said that the money would be contributed from the individual’s pension pot.  The Conservatives have never said how people will pay the premium, simply that it would be voluntary and would be £8,000.  So this passing remark at a hustings in Lower Morden, could be the moment that we learned how the Tories plan to get the money for their residential care premium – which is to take it out of people’s pension funds.

Watch this space!

Another Tory policy that helps the wealthy but does nothing to help the working poor

Figures released by the Lib Dems today revealed that 3.5 million pensioner households (66%) do not have assets of £8,000 excluding their home.

The figures show that;

63% of pensioner couples (1.4 million) do not have non-housing assets of £16,000

71% of single female pensioner households (1.6 million) do not have non-housing assets of £8,000

64% of single male pensioner households (600,000) do not have non-housing assets of £8,000

So this means that the Tory plan for pensioners to make a one-off contribution of £8000 to provide residential care if they need it, will not help the fast majority of pensioners.    The Tories claim that their plan would enable older people to pass their homes on to their children, but this proposal does not stack up against the figures released today, and if implemented, would mean that on retirement, someone without £8,000 in the bank would have to sell their home to get the money, find an equity release scheme or borrow the cash – or, not be able to take part in the scheme at all.

The Tory plans for social care are unworkable, unfair and unaffordable for the majority of pensioners in this country and do nothing to pay for the costs of care at home.

Whoever wins the next election cannot avoid the fact that we are facing a crisis in funding for care.  What we need is a long-term solution which is both fair and affordable.

The Statistics for the number of pensioners (over 65’s) estimated to have non-housing assets of £8,000 or for couples £16,000, were calculated by the House of Commons library on behalf of Norman Lamb MP.  They were calculated using the most recent Family Resources Survey data (2007/08) which provides an indication of the proportion of pensioners that have non-housing related assets or savings worth £8,000 or more.

In 2010, the average cost of residential care has been calculated to be £26,000 per year, including nursing care and board and lodgings costs.  The average length of stay in a care home is about two years for a man and three years for a woman, although some will remain in a care home for much longer.

Liberal Democrats are calling for a cross-party agreement to solve the problem of social care.  We want a long-term solution based on the principle of fairness and affordability.  Our preference is for a partnership model, with contributions by individuals and by the state, according to your needs and your income.   The amount of money needed to provide decent long-term care is enormous and that is why we believe a cross-party commission is needed to reach a consensus on social care.