Originally Posted by blueisthecolour:
“IMHO I think that some sort of additional house wealth/inheritance tax is what we need to deal with the situation. People built up vast amount of equity over their lifetime (usually without actually doing anything other than living in a house for multiple years). Why not use that money to pay for people's care in old age rather than giving it as a windfall to relatives? I understand that IHT is a sensitive subject but as far as i'm concerned it's one that does the least amount of damage to the economy or harm to individuals.”
Because looking after your family at that point becomes a lottery.
if Granny dies quickly the family inherit the house, and money and that family find it has money for the grandchildren's university fees, and pensions, and house deposits. Result - wealth passes down the generations and that family does well.
Granny lingers for 10 years, needing major care, and that family is left with nothing .
Worse if Granny avoided work , relied on state housing, and drank all her money and has nothing left to leave , the state picks up all the bill for her. The irresponisble do as well as those who saved to benefit their families.
Even worse , if the children of that family spend their time and money looking after granny - when she dies, they are not only inheritance free, but potentially sometimes homeless . The , child, carer often has their eggs placed in the family home basket to make up for what they can't earn caring.
Basically, sufferers buying their own care doesn't work. The burden either needs sharing around with some sort of insurance - whereby the risks are shared, or muddle on, or you can't look after granny.
Government won't tackle that though - because taxes just produce less economic activity and taxes, living standards are not growing enough anyway, and there's already too little money for everything else too.