The long-term problem for "generation rent"

We need to stop relying on home-ownership as the only way to build wealth if we're to have an adequa

It's been a bad few weeks for social care. First the faltering of Southern Cross, then Panorama's revelations about abuse at residential homes. Now, the Equalities and Human Rights Commission reveals shocking levels of neglect among older people cared for at home.

Coming on top of a set of daunting demographic trends, it all means Andrew Dilnot's review of social care funding - due out in early July - could not be more timely. As things stand, Dilnot's proposals don't offer the sustainable solution they claim to. That's because they're based on an assumption of home ownership that's becoming obsolete for many ordinary families.

One of Dilnot's central recommendations is expected to be that individuals should pay for their own social care up to a lifetime cap of around £50,000. After that, the government will step in to insure people against catastrophic costs. Analysis by researchers at the University of Kent estimates average lifetime costs for residential and community-based social care at around £18,650 for men and £41,350 for women. In other words, in most cases, government won't be called on at all. As in the current social care system, under Dilnot, most people will pay for the care they need themselves.

Because few people have ready access to £50,000 in savings, Dilnot's recommendation is predicated on people releasing equity from their homes. On the upside, this means people can stay in their own home into old age while making use of their house as an asset and relieving the government of some expense. As today's asset-rich baby boomer generation nears retirement, that all seems sensible. The question is: how many of the old in future generations will have a home to draw on?

Far fewer than today. One million new households have become renters since 2005. That brings the total number of households in the private rented sector to nearly 3.5m. Although most older people on low-to-middle incomes still their own home, the percentage under 35 who are renting has tripled since 1998.

No-one can predict what will happen to house prices in the long term, but trends like these make it is possible that we are at the beginning of a major shift away from home ownership. In line with other European economies, long-term renting could become far more common. That poses a major problem for a care policy premised on equity-release from a home.

Housing is only one type of asset that people could use to pay for their social care. Other assets, from pensions to savings, could do the same job. Today, few ordinary families have much in the way of these non-physical assets. In 2008, just over a quarter of people on low-to-middle incomes reported having a pension. Less than half made regular monthly savings. For those who did, the average amount saved was less than £200 a month.

As a proud, property-owning democracy, we've come to rely on home-ownership as the way to build wealth. We've backed that up with a tax system that treats housing more favourably than other kinds of assets. But if current trends in the housing market continue, the gap between home owners and long-term renters will affect far more than the housing market. If something isn't done to boost other forms of asset-ownership, it could also bring down the social care financing system that we're about to put in place.

 

Vidhya Alakeson is Director of Research at the Resolution Foundation

Vidhya Alakeson is deputy chief executive of the Resolution Foundation

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Hillary Clinton can take down the Donald Trump bogeyman - but she's up against the real thing

Donald Trump still has time to transform. 

Eight years later than hoped, Hillary Clinton finally ascended to the stage at the Democratic National Convention and accepted the nomination for President. 

Like her cheerleaders, the Obamas, she was strongest when addressing the invisible bogeyman - her rival for President, Donald Trump. 

Clinton looked the commander in chief when she dissed The Donald's claims to expertise on terrorism. 

Now Donald Trump says, and this is a quote, "I know more about ISIS than the generals do"

No, Donald, you don't.

He thinks that he knows more than our military because he claimed our armed forces are "a disaster."

Well, I've had the privilege to work closely with our troops and our veterans for many years.

Trump boasted that he alone could fix America. "Isn't he forgetting?" she asked:

Troops on the front lines. Police officers and fire fighters who run toward danger. Doctors and nurses who care for us. Teachers who change lives. Entrepreneurs who see possibilities in every problem.

Clinton's message was clear: I'm a team player. She praised supporters of her former rival for the nomination, Bernie Sanders, and concluded her takedown of Trump's ability as a fixer by declaring: "Americans don't say: 'I alone can fix it.' We say: 'We'll fix it together.'"

Being the opposite of Trump suits Clinton. As she acknowledged in her speech, she is not a natural public performer. But her cool, policy-packed speech served as a rebuke to Trump. She is most convincing when serious, and luckily that sets her apart from her rival. 

The Trump in the room with her at the convention was a boorish caricature, a man who describes women as pigs. "There is no other Donald Trump," she said. "This is it."

Clinton and her supporters are right to focus on personality. When it comes to the nuclear button, most fair-minded people on both left and right would prefer to give the decision to a rational, experienced character over one who enjoys a good explosion. 

But the fact is, outside of the convention arena, Trump still controls the narrative on Trump.

Trump has previously stated clearly his aim to "pivot" to the centre. He has declared that he can change "to anything I want to change to".  In his own speech, Trump forewent his usual diatribe for statistics about African-American children in poverty. He talked about embracing "crying mothers", "laid-off factory workers" and making sure "all of our kids are treated equally". His wife Melania opted for a speech so mainstream it was said to be borrowed from Michelle Obama. 

His personal attacks have also narrowed. Where once his Twitter feed was spattered with references to "lying Ted Cruz" and "little Marco Rubio", now the bile is focused on one person: "crooked Hillary Clinton". Just as Clinton defines herself against a caricature of him, so Trump is defining himself against one of her. 

Trump may not be able to maintain a more moderate image - at a press conference after his speech, he lashed out at his former rival, Ted Cruz. But if he can tone down his rhetoric until November, he will no longer be the bogeyman Clinton can shine so brilliantly against.