Letter From The Founder: Why Generation X Should be Cheering Burnham’s Social Care Plans

If you’re in your 40s or 50s, the headlines this week probably made you wince. Andy Burnham wants to water down the triple lock, and you’re the generation with the most retirement still ahead of you.

On the face of it, you’ve just been handed the bill.

Look a little closer, though, and I think you may have more reason to cheer than anyone.

What’s actually changing

From April 2030, the state pension will stop rising with wages. Instead it will go up by inflation or 2.5%, whichever is higher, with top-ups to keep it around 30% of median full-time earnings. The savings will help fund a national care service in England, free when you use it, like the NHS.

So yes, your future pension will probably grow more slowly than it would have. That’s the cost. Now for what you get.

Win one: your parents’ care stops being your problem

Ask anyone who has been through it. When a parent needs care, it’s rarely just their money on the line.

It’s your evenings, your annual leave, your phone ringing during meetings, and very often your savings topping up the shortfall.
Free personal care (help with washing, dressing, medication) changes that, particularly for parents who want to stay in their own homes.

That’s where this plan is strongest: the house isn’t counted when care happens at home, so free personal care protects their savings directly. For families juggling teenagers at one end and ageing parents at the other, that’s not a small thing.

Win two: the inheritance you were writing off

Plenty of people in their 40s and 50s have privately accepted that Mum and Dad’s house may disappear into care fees.

Today in England, a parent with more than £23,250 pays the full cost of their care until their money runs down.

Under the new plans, more of that estate survives. And the taxman isn’t waiting to scoop it up: fewer than one in 20 UK deaths results in an inheritance tax bill. For most families, what’s protected passes on in full.

Put bluntly, you pay a bit more through a smaller pension later. Your parents’ estate, which very often comes to you, is better protected now.

Win three: your own care, decades from now

The same service will be there when it’s your turn. You’re buying into an insurance policy against one of the most expensive and unpredictable bills of later life. Most of us will never need years of care. Some of us will, and nobody knows in advance which group they’ll be in.

Sharing that risk, the way we do with the NHS, is a good deal for anyone who isn’t certain they’ll stay healthy to the end.

The small print you shouldn’t ignore

Now for the less cheerful bits, because it would be wishful thinking on my part to pretend there aren’t any.

First, care homes. The government has said personal care will be covered, but accommodation in a residential or nursing home won’t be. Bed and board stays means-tested.

Scotland has had free personal care since 2002, and the council there pays £260.30 a week towards it. A permanent place in a council-run home in Shetland costs £2,194 a week. Families in Scotland still sell houses.

Second, the sums. The Health Foundation estimates free-at-the-point-of-use care would cost £18.5bn a year, and the IFS has warned that pension savings alone won’t cover it, so tax rises or spending cuts will be needed. Guess which age group pays most income tax.

Third, timing. Nothing changes until 2030, and the details depend on the next election.

So should you cheer?

On balance, I think so, if you have parents with a home or savings worth protecting. The deal for you is: a slightly smaller pension later, in exchange for less financial and emotional strain now, a better chance of inheriting, and protection for yourself down the line.

But I’d be uncomfortable if we cheered without noticing who doesn’t get that deal. A 50-year-old renter whose parents have nothing to pass on takes the same pension hit, with none of the inheritance upside. For them, this looks a lot less like a win.

If you’re one of the lucky ones, by all means raise a glass. Just don’t be surprised if the people standing next to you aren’t.