Ideally, one carries on as normal until one's very last day, then wakes up one morning feeling a bit dozy, manages to say goodbye to everyone and breathes one's last in the afternoon. For most of us, it does not work like that. Typically, one is liable to spend two years in some kind of care home. That means at any one time, around 2.5% of people are in care - about 1.5 million at any one time if the population is taken at 60 million. With care costs of around £40,000 a year, that works out at an annual cost of £60 billion. Bearing in mind that over one-third of this is tax, if all the cost was to be paid by the government the net annual cost would be just under £40 billion, which is just under 10% of annual government expenditure. If payment for care is means-tested, people have an incentive to spend their last penny. But within the lifetime of those who have just retired, inflation has reduced the value of money by a factor of 30 since they began work. Inflation is in effect...
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