Old Age Doesn’t Come Itself

I read the other week that a baby born in Britain today can expect to live beyond 81 years of age. In Japan, it’s 83 and scientists there have proposed that people between the age of 65 and 75 should no longer be considered “elderly”.

Good news, I suppose, although the cynic in me sees government think tanks all over this wondering how they can use it to push the state pension out to 75. It wouldn’t surprise me in the least though to think that in fifty years’ time, it’ll have reached 90 – if it exists at all at that point.

All the more reason to plan for a long retirement and, as I’ve mentioned before, there’s not a day goes by where I don’t say a wee prayer of thanks to whatever inspired me to start really saving for the future when I turned thirty and, even more, signing up to a Defined Benefit pension when I started work at 23 when I didn’t even understand what that was.

As ever these days, I’ve been doing some work on my pension projections and wondering (a) how long I should plan for and (b) how I should phase income as the years progress. It’s a bit disconcerting doing this, as one of the first questions to be faced is your lifespan – should I plan to see 85, or 90? Do I even want to consider the quality of life at 95, when I might have to retitle my blog Death, Death, Death, Death? Then the second question is what kind of life will I be leading if I do see 85, or 90, or longer?

One rule of thumb I thought about was that if everyone defines “old age” as beginning twenty years from your current age, then I should want to maintain my current lifestyle, and expenditure, until I’m 73. At least for this snapshot projection – I realise I can’t extend that rule indefinitely as the years pass by. It seems to me, however, that there’s just no way I’ll be spending as much at age 73 as I do now.

But, as I project forward through the years, wouldn’t a sensible thing to do with the saving on the mortgage be to bank it instead for health provision? We have friends in their late sixties who have top notch medical insurance (and boy have they been thankful for it recently, following a couple of serious scares and operations.) Their joint policy costs them a cool thousand pounds a month. Okay, that’s maybe top end, but I mentioned recently that some root canal work I had last year cost me the best part of a grand. If there’s one thing I’d like to take into old age, apart from my marbles, it’s my teeth. My mate is currently getting a tooth implant and is not looking for any change out of almost two thousand pounds. He feels it’s worth it though and I suspect he might be right. I think if there’s one thing I asked my parents that they really wish they didn’t have in old age the answer would be “Dentures”.

Health is a touchy subject, especially in Britain. The press is always harping on about the state of the NHS and, through personal connections including my 77 year old mum, I can attest to most of what is written. The social care side of our current system must be breathtakingly expensive – my mum receives three healthcare worker visits per day, seven days per week. What’s the cost of that?

Then I remember my dad, who suffered from Parkinson’s and was on 22 tablets a day for the illness and its complications. Not to mention the physiotherapy, the visits to hospital and GP, the call-outs for the community nurse. All this was paid for by the state. The only thing that wasn’t was my mum, acting as his carer at the time, although I think even she eventually applied and received an allowance for that too.

The costs of funding the NHS are inconceivable at the moment and downright terrifying when you think of the future. You just have to visit a general hospital to understand the challenges we face. Once you’ve negotiated your way past the smokers in the carpark, start counting – how many people do you see that are overweight? (I generally don’t count my reflection in the window.) Is it two out of three? How many are over sixty? Is it eight out of ten? More than that? The system we have just cannot cope, and you can only feel that it isn’t going to get better without a radical cultural change toward what the NHS is supposed to provide, regardless of how much money is thrown at it. How long will “cultural change” take? Two or three decades, maybe, if we start today. In the meantime, if you can, perhaps you better start putting some money aside to look after yourself for the times when the NHS can’t or wont.

“Old age is not for wimps”, someone once said, and the scary thing is that for the many of us who see it, that could be an understatement. Maybe I’m being negative, but of course, pondering my doddering old age in the future doesn’t get me down – as it’s simply not going to happen to me, is it? I’m going to be that sky-diving, bungee-jumping pensioner you read about who’s about to head off to trek across the Andes. As are you.

But what’s the contingency, and who’s going to look after us,  if we’re not?

18 thoughts on “Old Age Doesn’t Come Itself

  1. A curious question. What is the private insurance provider your friends are using? It is something that is increasingly bothering me about myself and my parents who are ageing quite rapidly. If you have any recommendations for private health providers I’d be curious.

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  2. I’d be slightly wary of thinking that private health insurers are going to ride to your rescue. They cherry pick. Sure, if you need a hip replacement and you are in good shape, it will help you jump the queue (but you really don’t need insurance for that, just cash). But they won’t be interested in the complex emergencies of the type that the frail elderly suffer. We all need and depend on the NHS for that.

    Another issue is that paying privately only helps if the market is actually working. For example, my elderly father has privately funded carers three times a day (and if you’re interested, that costs a bit less than £1000 a month. Since he spends next to nothing on anything else, this is affordable from his pension income). One set of carers served notice because they decided not to cover his area any more. Finding an acceptable replacement was not easy (I had four weeks), no matter how much money he was able to throw at the problem.

    So I’d say, if you have wealth, stay away from insurers (as you probably do in most other fields) and pay for what makes sense to pay for. And remember that in the bigger picture, we need to avoid the US model like the plague – it’s inefficient and outcomes are unimpressive. Insurers do quite nicely out of it though.

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    • I think I agree, that if I had a thousand a month to spend on health insurance it might be better to save it in a bank to supplement care from the NHS. Either way, as I get older, having the NHS as part of our national structure seems increasingly like a Godsend.

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  3. At the price you guys are paying to the medical leeches, have you ever considered doing an article on medical tourism?

    Places like Kuala Lumpur and Bangkok offer five star treatment (dental and general medical, hip replacements etc) at a fraction of the cost of the West. And a significant percentage of the medical staff are all trained in US or Uk. And the facilities are way better. (And the staff are usually more polite ;-)).

    It’s true like they say, you can indeed fly out, get your treatment, and still have a holiday to recuperate for less than you pay in Blighty or US.

    I set up a blog for medical tourism about 10 years ago: never got any traction largely because people ( mistakenly) seemed to think Malaysia/Thailand etc are third world countries…..well I’ve got news for them….

    Love the site, love the blog posts….!

    Cheers

    J

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    • @James B – I can’t believe you’re suggesting travel to Thailand for medical treatment. I wouldn’t go near the place even for a holiday; it is not a ‘free’ country. It’s been under martial law since a coup in 2014 (only the latest of many in Thailand), with resulting clampdowns on free speech, freedom to assemble/protest, and many reports of torture, imprisonment, or vanishing without trace, for those deemed to have committed political ‘offences’ (not to mention the ridiculous offence of insulting the monarchy), as well as all the other crap normally associated with authoritarian regimes. Anyone traveling to countries such as this are implicitly supporting this state of affairs.

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      • The thing that would concern me about getting anything done abroad would be the follow up treatment if there were any complications. When I see ex-pats coming back to the UK in their seventies I tend to think that it’s the promise of the NHS looking after them day after day, free of charge, regardless of their condition, that’s a big factor in their calculations.

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    • Thanks for the positive feedback J, I appreciate it. I’d be wary, however, of heading away from home for a big operation like a hip replacement. What if something went wrong? What if you were hospitalised for months afterward? I’ve been ill when abroad and hated the feeling of being out of sorts and alone a long way from home, so I don’t think I’d choose that.

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  4. I was talking to a friend who works in private medical care about this. Since so many people are shunning insurance, he said that they are seeing a huge rise in direct payment for minor treatment.
    As he pointed out, for anything life-threatening there is no real advantage as the private hospitals do not generally have the facilities and you would be treated by the same specialist as you would in the NHS and pretty much on the same schedule. In theory, if you take out insurance early then you can ‘lock in’ to a lower premium but he said this is no longer the case at all.
    So, all in all I think the answer is to maintain a healthy emergency fund and look after yourself. One thing I’m starting to investigate (I’m a few years short of SHMD) is the link between stamina, strength and flexibility. To avoid a hip replacement you need all three and with a desk job it’s not easy.

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    • I’d totally agree with you regards the desk job. The biggest thing I noticed within two months of returning to the office was the loss in overall fitness I experienced. I was back to the aches and pains, sore back and agitation that sitting before a computer screen hour after hour gives you. If anything makes me give up work again, it will be this – that work is not good for my health.

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  5. Talking of medical tourism, the NHS would do well to stop giving free treatment to non-nationals, many of whom take the treatment then leave without paying. This, among other things, is crippling the whole system for those who genuinely need it and who have already paid for the privilege during their working lives. Make them pay up front or send them packing.

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    • @Fatty: that kind of comment should definitely be backed by sources and data. If you pretend to have a solution, you should at least confirm you’ve done research to assess that the problem you’re trying to solve is real. Personally I wouldn’t be surprised if data showed us the problem you are talking about is a very tiny percentage of the actual issue.

      This article on the BBC ( http://www.bbc.com/news/uk-england-32449653 ) says Health tourism in the UK costs about 200M pounds a year, or about 0.3% of the NHS bill. Reclaiming the money won’t help much.

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    • We’re disputing that health tourism is a significant factor in the pressures facing the NHS. It simply isn’t. The main drivers of healthcare costs are people getting older, and medical innovation. This means that inflation pressures in any contemporary health system (not just the NHS) are higher than headline inflation measures. And since NHS funding has been cut in real terms in recent years, it’s not surprising the system is under pressure.

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  6. I’m of a similar view to @Stockbeard – ‘health tourism’ always makes big news but is a drop in the ocean really. What’s more of a concern is the huge number of Brits who put a strain on NHS resources due to their choice of unhealthy lifestyles, resulting in many suffering from type 2 diabetes. Treatment of type 2 diabetes currently costs the NHS £9 billion, yet the disease is largely preventable and can be managed by leading a healthier lifestyle (although family history and age can be a factor). https://www.gov.uk/government/news/38-million-people-in-england-now-have-diabetes

    Diabetes runs in my family so it could be that I will get it when I’m older but I hope that by trying to stay healthy, I can put off using NHS services that bit longer. Plus, being ill costs money because prescriptions won’t be free for me until I’m 60, unless the government changes that rule too in the future.

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    • I am not a big fan of this healthy lifestyles argument beyond a certain point. We are all without exception on a journey to the same destination – death. And dying will be expensive younger or older.

      Anyway a lot of factors relating to having a healthy lifestyle are circumstantial and not fully in any individuals control. It is much more difficult to have a healthy lifestyle if you are on a low income for example. I have a very unhealthy lifestyle in that I am a shift worker. It is very difficult for me to change that in the short to medium term.

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  7. “Never insure for a loss you can afford to bear”. As the NHS act as a backstop for anything emergency or complicated, and are technically superb, you just go private to avoid the dreadful bureaucracy and hasten treatment, which you might as well do PAYG on a case-by-case basis. Your healthy emergency fund should be a health emergency fund.

    BTW, I can recommend root canal work in the Galapagos, very cheap and the wildlife distracts from the pain…

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