Tuesday, March 30, 2010

Talking about my generation

So Andy Burnham has decided a 10% death tax won't fly. I'm sorry about that. As a 57 year old with an 84 year old mum, funding care for the elderly is an issue that affects me personally, and of all the solutions on the table the 10% tax seemed the best deal.

This is why I like the 10% tax: The average price of a property in the UK is £168,000 (which happens to be roughly what I and my brother expect to inherit from my mother). The average stay in a care home is three years, at £20,000 a year, so if mum's home was sold after she went into a care home, on the current rules we could expect to pay around £60,000 from the sale of her house for her fees. It is obvious that a 10% tax is a better deal at only £16,800.

The current rules are not equitable, and how much property owners have to pay for their care is a lottery. In fact, my father left his share of the house to me and my brother, which has the effect that if my mother does go into a home the authority cannot force a sale, and would probably value mum's share of the house at £ nil, meaning we don't pay a penny. Other people end up having to pay much more than £60,000.

The 10% tax would bring some fairness, and what I also like about it is the element of redistribution, from richer to poorer households, but also from the house equity rich South-East to the Midlands and North.

It seems to me that the new proposal to cap care-home fees to two years, about £40,000, is going to leave most property owners worse off than the 10% death tax would have done. Only people with properties worth more than £400,000 will benefit, which even excludes most people in the South-East.

Oh, and I don't take the Tories proposal for a voluntary £8,000 levy seriously because the figures don't add up, but it was probably unnecessary for me to say that.

Tuesday, March 9, 2010


Some on-line advertisements need a translator. What has Bob Geldof got to do with premium bonds? Who told him that greasy hair and a mullet goes with a sports jacket? Why does he look so puzzled? -- Has he lost his car keys, or forgotten his own name, or is he as baffled by his relevance to National Savings as I am? More importantly, how much did NS&I pay him?