The Full English Accompaniment – Are you ignoring the biggest risk?

What’s piqued my interest this week?

I bang on about it a lot, so I’ll make this post short. I’ve spent a lot of my working life treating people who are knocking on death’s door. That’s not just the old and the sick, but also people who have had the worst day of their life. They woke up thinking that day was going to be like any other, and they end up lying in the bed of A&E Resus. A lot of the themes of what they tell me come through that influential book, The Top Five Regrets of the Dying (1). TL:DR, the top five are:

  • I wish I’d had the courage to live a life true to myself, not the life expected of me
  • I wish I hadn’t worked so hard
  • I wish I’d had the courage to express my feelings
  • I wish I had stayed in touch with my friends
  • I wish I had let myself be happier (2)

Hard lines. Many echo in the motivations for early retirement, as we hope to reconnect with friends, find happiness and express our feelings in new hobbies and activities. At it’s core early retirement allows us to live a life true to our hopes, dreams and interests, and not based upon the expectations of the man.

All this post aims to do is to challenge the weightings mentally applied to the above. The trade-off made between working hard for the future, and enjoying the now. There is a temptation to work twice as hard to reach an early retirement future in half the time. That relies upon the certainty of your future. That certainty is a risk that needs to be thought about and managed, by taking care of yourself. Having a million quid in the bank is useless if you’ve given yourself scurvy by eating nothing but porridge and rice. I’ll end this with two short examples pulled from the Reddit vaults (3, 4):

Have a morbid great week,

The Shrink

Other News

Opinion/ blogs:

The kitchen garden:

What I’m reading (now affiliate links):

Tombland – C.J. Sansom – I love the Shardlake series, detective novels set in the Tudor period with a crippled lead character. Beautifully written.

Food Of The Gods: The Search for the Original Tree of Knowledge: A Radical History of Plants, Drugs and Human Evolution – Terence McKenna – An ethnobotanist explores humanitys’ fascination with hallucinogenics, and the role of altered states of consciousness on the development of human society.

SowHow: A Modern Guide to Grow-Your-Own-Veg – Paul Matson & Lucy Anna Scott – I’ve been reading this in the evenings ahead of the sowing season. Simple, neat and effective in both design and instruction.

Enchiridion by Epictetus – Bedside reading for a bad day

References:

  1. https://amzn.to/2TOczPu
  2. https://www.theguardian.com/lifeandstyle/2012/feb/01/top-five-regrets-of-the-dying
  3. https://www.reddit.com/r/financialindependence/comments/8vwc8l/consider_that_you_might_never_enjoy_your_nest_egg/
  4. https://www.reddit.com/r/FIREUK/comments/amfmuv/ahso_ive_been_mitigating_the_wrong_risk/
  5. https://www.which.co.uk/news/2019/02/starling-launches-euro-currency-account-could-it-save-your-cash-from-brexit/
  6. https://www.bbc.co.uk/news/av/uk-politics-47164882/what-would-you-do-if-you-were-financially-independent
  7. https://www.theguardian.com/business/2019/feb/07/bank-of-england-holds-interest-rates-cuts-growth-forecast
  8. http://www.bbc.co.uk/news/business-47155145
  9. https://www.theguardian.com/money/2019/feb/07/uk-house-prices-fall-in-january-as-brexit-puts-off-buyers
  10. http://www.bbc.co.uk/news/business-47133564
  11. http://www.bbc.co.uk/news/business-47068401
  12. https://www.physicianonfire.com/fire-movement/
  13. http://diyinvestoruk.blogspot.com/2019/02/a-look-at-green-bonds.html
  14. https://youngfiguy.com/just-because-you-can-doesnt-mean-you-should/
  15. https://www.ukvalueinvestor.com/2019/02/n-brown-dividend-cut.html/
  16. http://eaglesfeartoperch.blogspot.com/2019/02/high-yield-portfolio-whats-in-name.html
  17. https://cashflowcop.com/my-stone-of-life/
  18. https://theescapeartist.me/2019/02/05/work-bitch/
  19. https://www.msziyou.com/net-worth-updates-january-2019/
  20. http://www.retirementinvestingtoday.com/2019/02/managing-retirement-drawdown.html
  21. https://ditchthecave.com/january2019update/
  22. http://www.thefrugalcottage.com/dividend-income-january-2019/
  23. https://firevlondon.com/2019/02/03/january-2019-many-happy-returns/
  24. http://quietlysaving.co.uk/2019/02/02/january-2019-plus-other-updates-2/
  25. https://drfire.co.uk/investment-strategy/
  26. https://indeedably.com/shortcut/
  27. https://monevator.com/low-cost-index-trackers/
  28. https://monevator.com/find-the-best-online-broker/
  29. https://monevator.com/is-capitalism-in-crisis/
  30. https://firethe9to5.com/2019/02/03/its-official-i-fired-the-9-to-5/
  31. https://lovelygreens.com/create-wood-chip-garden-paths/
  32. https://sharpenyourspades.com/2019/02/04/incredible-crops-im-growing-in-2019-vital-seeds/
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The Full English Accompaniment – No-deal Brexit will cure obesity

What’s piqued my interest this week?

Bear with me.

Are you ready to starve?

Is basically the sensationalist headline that’s been flying around in various forms in response to our governments arse-covering. Pretty much all the major supermarkets have warned a no-deal Brexit will bring food security issues and provision to UK supermarkets will be… spotty (1, 2, 3, 4, 5). Remember the #courgettecrisis of ’17 caused by crap Spanish weather (6).

The argument from the Brexiteers is that we should grow our own, in some sort of dig-for-victory rose-tinted halcyon view of post-war Britain. Has anyone explained that crops take time to bloody grow? And the reason the UK became so reliant during WW2 on home-grown produce was food scarcity and rationing? They’re not going to be able to magic up the tomatoes for your £1.99 own-brand high-salt high-sugar pepperoni pizza out of Morris the pensioners’ greenhouse in Didcot.

Knock-on effects of no deal Brexit are no more cheap fruit, veg, meat and processing from the continents fields and factories (7). The price of food will rise. We already have it bloody good compared to the rest of the world. The average UK household spends 8% of it’s earnings on food a year. Compare that to the rest of Europe where it’s more like 10-15% (8).

This is thanks in no small part to cheap imports and the competition between the big supermarkets. They’ve squeezed every inch out of overheads as they’ve grown to maximise profits, with vast supply chains that have taken years to develop. Even then their headline figures are minimal. Check out this chart I pinched from Reddit for Tesco, which has their net profit at a shade under 1.5%:

They can’t soak up wholesale food cost rises. It has to go the consumer. The range of food available will decrease to be more seasonal, and the price will go up to reflect the more expensive supply chain. There’s no need for a bloody sugar tax, Brexit will do that for us (9, 10).

So who are going to be affected as food prices go up?

Well the working class, or should I say those in lower socioeconomic classes, who disproportionately voted to leave (11). Because you have to buy cheaper food, and cheaper food is made with more sugar, more salt, more industrially produced refined products to cover up the lack of actual food (12). Poorer people eat less varied diets consisting of more commercially grown produce imported to the UK. Processing means factories means mileage and countries crossed (13). It doesn’t have to be that way; a healthy varied seasonal diet can be cheaper. It just takes thinking about, time and effort (14).

Outcome of post-Brexit scarcity: either people eat more varied seasonal food because they have to, because that’s all that’s available; or they eat less of the high-sugar, high-fat, low-fibre processed shite that is associated with obesity etc, because it’s expensive (15, 16). The sloven stacking microwave burgers into their slack jaw can now only afford two rather than three at once. Both improve public health (17).

So maybe Brexit will solve one of the greatest ongoing public health crises, starve the nation and (by cost reduction) save the NHS. £350 million is a lot of ready meals.

I’m aware of the irony of this rant given the Full English title.

Have a great week,

The Shrink

Other News

Opinion/ blogs:

The kitchen garden:

What I’m reading (now affiliate links):

Tombland – C.J. Sansom – I love the Shardlake series, detective novels set in the Tudor period with a crippled lead character. Beautifully written.

Food Of The Gods: The Search for the Original Tree of Knowledge: A Radical History of Plants, Drugs and Human Evolution – Terence McKenna – An ethnobotanist explores humanitys’ fascination with hallucinogenics, and the role of altered states of consciousness on the development of human society.

Enchiridion by Epictetus – Bedside reading for a bad day

References:

  1. https://www.independent.co.uk/news/business/news/no-deal-brexit-uk-food-security-risk-sainsburys-asda-waitrose-supermarkets-a8750466.html
  2. https://www.fcrn.org.uk/research-library/food-security-uk-post-brexit-view
  3. https://www.bbc.co.uk/news/business-47028748
  4. https://foodresearch.org.uk/publications/feeding-britain-food-security-after-brexit/
  5. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/557993/AUK-2015-05oct16.pdf
  6. https://www.bbc.co.uk/news/uk-38666752
  7. https://www.bbc.co.uk/news/business-39030755
  8. https://www.bbc.co.uk/news/business-45559594
  9. https://www.bbc.co.uk/news/health-46736124
  10. https://www.bbcgoodfood.com/howto/guide/jack-monroe-talks-sugar-addiction-child-poverty-and-gives-her-views-sugar-tax
  11. https://www.ncbi.nlm.nih.gov/pubmed/23846088
  12. http://glopan.org/sites/default/files/ForesightReport.pdf
  13. https://www.eta.co.uk/environmental-info/food-miles/
  14. https://www.independent.co.uk/life-style/health-and-families/features/healthy-eating-cheap-cost-unhealthy-food-obesity-diabetes-poverty-a8535701.html
  15. https://www.nutrition.org.uk/nutritioninthenews/headlines/ultraprocessedfoods.html
  16. https://www.theguardian.com/science/2018/feb/02/ultra-processed-products-now-half-of-all-uk-family-food-purchases
  17. https://www.bmj.com/content/364/bmj.l296
  18. https://www.theguardian.com/money/shortcuts/2019/jan/28/100-per-cent-mortgage-lloyds-is-it-worth-risk
  19. https://www.autoexpress.co.uk/car-news/105814/uk-firm-launches-public-ev-chargers-embedded-into-kerb
  20. https://www.theguardian.com/business/2019/feb/01/tsb-computer-meltdown-bill-rises-to-330m
  21. https://www.theguardian.com/business/2019/feb/01/decline-in-quality-auditors-face-scrutiny-over-string-of-scandals
  22. https://www.bbc.co.uk/news/business-47085479
  23. https://www.bbc.co.uk/news/business-47086920
  24. https://www.which.co.uk/news/2019/02/new-best-savings-rate-launches-are-instant-access-accounts-looking-up/
  25. https://www.imperial.ac.uk/media/imperial-college/administration-and-support-services/enterprise-office/public/Table-of-Disruptive-Technologies.pdf
  26. https://indeedably.com/i-own/
  27. https://indeedably.com/reentry/
  28. https://thesavingninja.com/minimalism-part-2-clothes-clothes-everywhere/
  29. https://ditchthecave.com/networking/
  30. https://www.msziyou.com/msziyou-turns-one/
  31. https://simplelivingsomerset.wordpress.com/2019/01/29/100-mortgage-backed-by-bomad-ive-seen-this-movie-before-it-didnt-end-well/
  32. https://simplelivingsomerset.wordpress.com/2019/01/31/will-the-last-uk-finance-blogger-please-switch-off-the-lights-on-their-way-to-twitter/
  33. http://thefirestarter.co.uk/should-i-stay-or-should-i-go-plus-introducing-tfs-merch/
  34. http://www.thefrugalcottage.com/january-2019-a-month-in-review/
  35. https://littlemissfire.com/de-clutter-and-reselling-update-2019/
  36. https://littlemissfire.com/our-future-goals-2019-and-beyond/
  37. https://youngfiguy.com/my-investing-journey/
  38. https://monevator.com/who-are-you-kid-ing-understanding-the-ongoing-charge-figure-of-an-investment-trust/
  39. https://www.mrmoneymustache.com/2019/01/28/how-to-slow-down-time-and-live-longer/
  40. https://gentlemansfamilyfinances.wordpress.com/2019/01/29/6-top-tips-for-millennials-to-solve-the-property-puzzle/
  41. https://gentlemansfamilyfinances.wordpress.com/2019/01/31/tax-return-completed/
  42. https://gentlemansfamilyfinances.wordpress.com/2019/02/01/month-end-accounts-january-2019/
  43. https://www.ukvalueinvestor.com/2019/01/risk-of-corporate-debt.html/
  44. https://www.ukvalueinvestor.com/2019/01/investing-in-turnarounds-recovery-stocks-and-corporate-transformations.html/
  45. https://firevlondon.com/2019/01/27/declaration-of-financial-independence/
  46. https://theescapeartist.me/2019/01/26/how-to-have-a-great-day/
  47. http://eaglesfeartoperch.blogspot.com/2019/01/new-high-yield-group-within-sipp.html
  48. http://quietlysaving.co.uk/2019/02/02/january-2019-plus-other-updates-2/
  49. https://www.visualcapitalist.com
  50. https://agentsoffield.com/2019/01/20/new-year-new-challenges/
  51. https://sharpenyourspades.com/2019/01/19/11-must-grow-vegetables-in-2019-allotment-gardeners-reveal-their-favourite-crops/
  52. https://sharpenyourspades.com/2019/01/31/10-highlights-from-the-grow-your-own-blogs-january-2019/
  53. https://www.jackwallington.com/my-allotment-plan-for-2019/

Full English Accompaniment – It’s ok to not be ok

What’s piqued my interest this week?

Over the Christmas and New Year break I’ve been reading lots of blogs from across the pond and around the world. I don’t usually talk mental health on this blog. As part of a strict work-life balance the closest I get is usually philosophy. A post by Liz, Mrs Frugalwood, prompted me to break that rule (1). I’ve particularly enjoyed the tales from the Frugalwoods, whose ‘homestead’ dream sits nicely with my own smallholding aspirations. In her post, Liz talks articulately and openly about the experience, the feelings, of postpartum depression.

“My friend Melanie Lockert recently told me that “depression lies to you.” It tells you that you’re worthless, it tells you that you’re hopeless and stupid. But this isn’t true. You can be pulled out of this heavy fog. Please allow yourself to be helped.” (1)

Other UK finance bloggers have also eloquently related their experiences of mental illness; Mr and Mrs Young FI Guy, Little Miss Fire, Wephway at Deliberate Living UK and Sonia at MFTMG to name a few (2, 3, 4, 5, 6). I’m sure there are others, and I’m sure there are those who choose not to share. Mental illness is hidden in plain sight. Every week, one in six adults experiences mental health problems (7). One in five adults has considered suicide (7). Mental illness is the biggest cause for lost productivity globally, anxiety and depression alone accounting for $1 trillion lost annually (8). For stigma to remain around something so common is crazy.

I hope the stigma is improving, certainly since I’ve been practising more people from all walks of life present to see us rather than suffering in silence. For some people there’s a reason, a trigger. Life is full of bumps in the road, stresses and unexpected turns of events which can throw the wheel off your cart. Everybody deals with things in different ways, and what could be a major issue for one person could be a casual shrug for another. We’re all wired differently. Some people’s moods vary more (9). For other people there is no identifiable trigger or cause. It just is. Mental illness is an illness. You don’t need a reason to get appendicitis, it’s just crap luck.

It stands to reason that the rates of mental illness should be no different in the financial blogging community. I’ve privately wondered if they’re actually higher. Financial independence and diligent saving takes order, structure and self-control. It requires attention to detail and extensive planning. When something throws an unexpected spanner in the works, e.g. MMM’s ongoing divorce, it can put a lot of stress on not only your financial system but your mental system too (10). You can’t plan for everything.

Have a great week,

The Shrink

N.B. Apologies for the late post. I’ve spent the weekend away, bumped into Mr and MrsYFG, and discovered that we’ve known each other several years through a mutual friend. Small world.

Side Orders

Other News

Opinion/ blogs:

  • I really enjoyed this video from The Plain Bagel on the Grossman Stiglitz Paradox

The kitchen garden:

What I’m reading (now affiliate links):

Rivers of London – Ben Aaronovitch – This was an absolute corker that I read in a fortnight. First time in ages I’ve stayed awake to one am reading. Looks like another series to get into.

Starting with Chickens – Kate Thear – A hint to a goal for 2019

Enchiridion by Epictetus – Bedside reading for a bad day

References:

  1. https://www.frugalwoods.com/2018/09/07/how-a-diagnosis-of-postpartum-depression-changed-my-life/
  2. https://youngfiguy.com/depression-and-working-in-finance/
  3. https://youngfiguy.com/mrs-yfg-anxiety-and-working-in-law/
  4. https://littlemissfireblog.wordpress.com/2018/11/09/your-mental-health-is-more-important-than-your-bank-balance/
  5. https://deliberatelivinguk.wordpress.com/2018/05/16/on-depression/
  6. http://www.moneyforthemoderngirl.org/counselling-and-financial-independence/
  7. https://www.mentalhealth.org.uk/publications/fundamental-facts-about-mental-health-2016
  8. https://www.who.int/mental_health/in_the_workplace/en/
  9. https://www.raptitude.com/2018/10/its-okay-to-feel-bad-for-no-reason/
  10. https://www.mrmoneymustache.com/2018/12/31/divorce/
  11. https://www.bbc.co.uk/news/business-46720637
  12. https://www.bbc.co.uk/news/business-46736964
  13. https://www.bbc.co.uk/news/business-46739805
  14. https://www.moneysavingexpert.com/news/2019/01/26-30-railcard-goes-on-sale-today/
  15. https://www.dailymail.co.uk/money/guides/article-6545361/30-clever-ways-transform-fortunes-2019.html
  16. https://www.dailymail.co.uk/money/diyinvesting/article-6545167/THE-PRUDENT-INVESTOR-tips-protect-2019-disaster-Jeremy-Corbyn-strikes.html
  17. https://www.theguardian.com/environment/2019/jan/03/uk-power-stations-electricity-output-lowest-1994-renewables-record
  18. https://www.independent.co.uk/voices/stock-market-pound-dollar-value-facebook-apple-financial-volatility-economics-a8704056.html
  19. http://www.retirementinvestingtoday.com/2019/01/2018-hyp-review.html
  20. https://youngfiguy.com/my-top-books-of-2018/
  21. http://quietlysaving.co.uk/2019/01/01/december-2018-savings-plus-roundup/
  22. http://quietlysaving.co.uk/2019/01/05/2019-goals/
  23. https://thesavingninja.com/savings-report-6-december/
  24. http://www.thefrugalcottage.com/2019-goals/
  25. http://www.next-chapter-fi.uk/spending-report-december-2018/
  26. https://indeedably.com/conflict-of-interest/
  27. https://indeedably.com/spectator-sports/
  28. https://indeedably.com/i-own/
  29. https://simplelivingsomerset.wordpress.com/2019/01/04/new-year-new-you-new-hope/
  30. https://theescapeartist.me/2019/01/03/get-rich-with-no-regrets/
  31. http://eaglesfeartoperch.blogspot.com/2019/01/investment-review-december-2018.html
  32. https://littlemissfireblog.wordpress.com/2019/01/03/ive-moved-house/
  33. https://littlemissfire.com/why-new-years-resolutions-fail-and-ours-wont/
  34. http://www.thefinancezombie.com/2019/01/its-a-wrap.html
  35. https://gentlemansfamilyfinances.wordpress.com/2019/01/04/month-end-accounts-december-2018-2/
  36. http://earlyretirementinuk.blogspot.com/2019/01/december-general-overview.html
  37. https://obviousinvestor.com/growth-portfolio-update-for-december-2018/
  38. https://firevlondon.com/2019/01/05/december-returns-and-2018-review/
  39. https://www.jackwallington.com/looking-back-on-a-year-of-vegetables-fruit-and-edible-flowers/
  40. https://sharpenyourspades.com/2019/01/02/2018-an-allotment-year-in-pictures/
  41. https://paulnelson90.wordpress.com/2018/12/30/yule-celebrations-the-wheel-of-the-year/

 

The Full English Accompaniment – A nation of preppers?

What’s piqued my interest this week?

This week that bulwark of British strength Theresa May advised us all we should start prepping for a “no-deal” Brexit, just as the Government had by stockpiling food and medication. We should “take comfort” in the Government’s actions (1). “It’s right to prepare for all eventualities” (2). Unfortunately the actual understanding of how they’re going to do this is lacking (3). Currently the EU supplies 31% of the UK’s food, and Brexit will have huge implications across the supply chain (4, 5).

This led to lots of media outlets running pieces on ‘what to stockpile’. The Guardian recommended olive oil, pasta, pepper, rice, spices (6)The BBC warned of the threat to our sandwiches (7). Heavens! Anything but the sandwiches! Even The New Scientist got in on the act (8). Plenty of organisations are piling on the warning bandwagon. The UK dairy industry has warned that butter, yoghurt and cheese will be occaisional luxuries (9).

My solution to this problem is to gradually move my consumption to more local suppliers. Coming from a farming family I’ve always tried to support UK growers. For at least the past few years I’ve only bought UK grown seasonal veg, and cooked based on what is in season. Very middle class yes, but healthier, more varied, and often cheaper. This year I’ve tried to take this further, using a local butcher and market garden co-operative (feel free to roll your eyes) delivery. It appears I’m not alone. We all saw Blue Planet 2, the anti-plastic movement gains traction, and people are finding ways of reducing their packaging usage. One of these ways is going back to the local milkman with his bottles. Milkmen are seeing a surge in demand throughout the country (10). Fresh local milk served in retro glass bottles delivered by an electric van does sound pretty ‘now’. Expansion has not been without it’s problems for the national Milk&More, but these appear to be teething problems (11). The traditional local trader milkmen are doing better (12). We’ve come full circle with convenient deliveries from local producers. Everything old is new again.

Have a great weekend,

The Shrink

Side Orders

Other News:

Opinion/ blogs:

What I’m reading:

Eric – Terry Pratchett – light relief

Religio Medici and Urne-Buriall by Sir Thomas Browne – the theological and psychological reflections of a C17th doctor

Enchiridion by Epictetus – Bedside reading for a bad day

 

 

References:

  1. https://www.telegraph.co.uk/politics/2018/07/25/plans-stockpile-food-blood-medicine-case-no-deal-brexit-sensible/
  2. https://www.bbc.co.uk/news/av/uk-politics-44972582/brexit-is-uk-planning-to-stockpile-food
  3. https://www.theguardian.com/commentisfree/2018/jul/26/stockpile-food-no-deal-brexit-dream-on
  4. https://www.independent.co.uk/news/uk/politics/brexit-latest-food-supplies-shortage-warning-policy-failure-supermarkets-imports-eu-a7844751.html
  5. http://www.sussex.ac.uk/spru/newsandevents/2017/publications/food-brexit
  6. https://www.theguardian.com/politics/shortcuts/2018/jul/12/a-no-deal-brexit-survival-guide-what-food-to-stockpile
  7. https://www.bbc.co.uk/news/business-44960293
  8. https://www.newscientist.com/article/2175259-the-scientific-guide-to-stockpiling-food-for-a-no-deal-brexit/
  9. https://www.independent.co.uk/news/business/news/brexit-dairy-products-butter-milk-cheese-industry-warning-lse-study-a8452501.html
  10. https://www.theguardian.com/lifeandstyle/2018/feb/07/return-milkround-plastic-problem-glass-bottle-deliveries
  11. https://www.theguardian.com/money/2018/apr/02/milk-and-more-grocery-delivery-delays
  12. http://www.itv.com/news/wales/2018-05-02/milk-bottle-sales-booming-as-consumers-turn-their-backs-on-plastic/
  13. http://www.bbc.co.uk/news/business-44926442
  14. https://www.bbc.co.uk/news/business-44950610
  15. https://www.bbc.co.uk/news/business-44202542
  16. https://www.telegraph.co.uk/personal-banking/savings/basic-savings-rate-would-reward-loyal-customers-banks-wont-take/
  17. https://www.telegraph.co.uk/personal-banking/mortgages/concern-thousands-mortgage-borrowers-fall-immediate-financial/
  18. https://www.telegraph.co.uk/investing/bonds/new-retail-bond-fund-pays-45pc-year/
  19. https://www.theguardian.com/money/2018/jul/25/uk-pensioners-income-growth-outstrips-wage-rises-ons-estimates
  20. https://www.bbc.co.uk/news/business-44732847
  21. https://www.theguardian.com/business/2018/jul/28/uk-interest-rates-finally-rise-bank-of-england
  22. https://www.bbc.co.uk/news/uk-44943672
  23. https://www.theguardian.com/money/2018/jul/26/household-debt-in-uk-worse-than-at-any-time-on-record
  24. https://www.bbc.co.uk/news/business-44926447
  25. http://monevator.com/find-the-best-online-broker/
  26. http://www.thefrugalcottage.com/what-would-you-do-if-you-won-the-lottery-giveaway/
  27. http://www.thefrugalcottage.com/life-update-20/
  28. http://www.msziyou.com/identifying-as-xennial/
  29. https://theescapeartist.me/2018/07/24/the-art-of-wealth-preservation/
  30. http://www.retirementinvestingtoday.com/2018/07/sobering-retirement-income-drawdown.html
  31. https://www.ukvalueinvestor.com/2018/07/measuring-investment-performance.html/
  32. http://monevator.com/death-to-the-lifetime-isa/
  33. https://youngfiguy.com/why-the-lifetime-isa-is-not-a-simple-to-understand-product
  34. https://youngfiguy.com/palms-up-or-palms-down-person

Musing on… Long-term care costs and financial savings

This post has been mulled over for a long time, trying to discern and distil a direction. It began (as these trains of thought often do) with an idle r/financialindependence post. If you’re not familiar with that, it’s a subreddit for FI-types, predominantly populated by Yanks (Reddit being a sort of forum-cum-meta-aggregator of internet waffle). In this post a group of our ex-colonial cousins were discussing long-term costs (1):

So far, so not our problem. The UK may have significantly higher tax rates (ignoring ISAs etc), but it pays for (in theory) the NHS and social care, the cradle-to-grave support system for when times are bad. The NHS and social care system are what makes FIRE and any sort of fuck-you to working possible in the UK. Check out the video and post TEA and Rhik Samadder did on the matter (2).

National, personal cover

As we celebrate the NHS’ 70th birthday, it’s worth reflecting on where this all came from. Before the birth of the NHS all doctors services were private in the UK. If you needed something, you went to your local doctor, hoped they had been trained adequately, paid your money, got your treatment, hoped it worked. There were no guidelines. There was no standardisation. This worked fine for the wealthy, who could afford the best, but for the poor would die from an inability to pay the doctor. You can find plenty of stories from that time, but if you read one, I recommend the recollections of the wonderful Harry Leslie Smith (3). He remembers a doctors visit costing half-a-weeks wages, which they sadly did not have (3). This private price has scaled with inflation. A 15 minute private GP consultation will set you back £70 (4). As a profession we remain a rare commodity, and on an open market our hourly rate is such. The NHS affords the government a position of power and collective contractual employment which, despite press vilification, means we still come relatively cheap.

In the days before the NHS, workers would club together to pay for ‘self-help’ organisations, to provide medical care for one another. Beginning in the late 1800s, the Tredegar Workmen’s Medical Aid Society was one such successful organisation (5):

By the 1920s, the society employed the services of five doctors, one surgeon, two pharmacists, a physiotherapist, a dentist, and a district nurse. For an extra sum each week, members could also benefit from hospital treatment.

During the inter-war depression, the society continued to provide services to unemployed people, even though they could no longer afford to pay a subscription. By the mid-1940s, the society was providing medical care for 22,800 of the town’s 24,000 inhabitants.

Aneurin Bevan, who was born in Tredegar, took the Workmen’s Medical Aid Society as his inspiration for the NHS, saying: “All I am doing is extending to the entire population of Britain the benefits we had in Tredegar for a generation or more. We are going to ‘Tredegarise’ you.” (5)

The fragmentation of the NHS, gradual privatisation and reduction in care available deserves a separate post. For now, with a sense of perspective, we can look across the pond and be smug about our NHS (6). Cradle to grave cover, in our most frail years, maternity and care home. Isn’t it marvellous. Except… have you ever been in an NHS care home? And how much do you think that care home costs?

Who wants to live forever?

Time and again bloggers discuss their financial plans, how they’re 50 now, and they see themselves having 30 more good years. They fall into a common trap, recent research shows 8/10 of those over 50 underestimate their life expectancy (7). Most people guess they’ll live to 82-ish, whereas the data says more like 88 for men, and 90 for women*. We have got much better at keeping people alive for longer. Those aren’t necessarily going to be good years though, and so people trot out those bleak jokes; “oh just roll me off a cliff at 80”; “I’ll just head off to Switzerland”; “I’ll just pop my clogs then”. Except those are all to varying degrees illegal/ unethical. We doctors can’t just settle you off in a dignified way when you decide you’re not much use or aren’t enjoying things anymore. How do you decide when that is? Death is so very final. As a culture we have developed a fear of discussing or even considering our own mortality.

(*N.B. You can’t actually use ONS life expectancy at birth figures for this. Infancy through to teenage years (and early adulthood for young men) still have higher mortality. Once you pass your mid-20s your life expectancy actually statistically increases to accommodate for this.)

So for our friends the FIRE-savers, that’s an extra half decade of savings to account for. Suddenly retiring at 55 with a 4% SWR estimating a 30 year retirement isn’t quite enough (8). Life expectancy has increased in the 20 years since the Trinity study was published (9). A 45 year-old sitting down now and estimating for a 4% withdrawal starting at age 55 may well have a good 40 years ahead of them. It’s not just the %withdrawal that’s a variable in this calculation, it’s the duration too. For some really interesting drawdown calculations, check out RIT’s recent post (10).

The final splurge

How much do you think your living costs will be too? The common practice appears to be to take roughly your current living expenses, and times that out for the number of years you need. Some people estimate less, as they figure their homes will be paid off. An interesting piece of research by investment firm Schroders casts doubt on that. It found that savers underestimated their living costs in retirement by 15% (11). Only half of people surveyed had enough to live on comfortably (11).

Coming back to people facing their own mortality, and a decline into frailty, did you include the care home fees in that cost? The answer to the previous question is that the average care home price per year in the UK is £29,270 for a residential home, £39,300 for a nursing home (12). That’s average too, as with everything the South is more expensive, and we all like to imagine ourselves in our twilight years in a beautiful peaceful home, and not being roughly manhandled by someone on minimum-wage with no dignity or care, before being hauled up on a CQC newspaper expose (13). If you want to see what it’s like in your area, the UK Care Guide has a number cruncher and area analysis (14). You can decide to stay in your own home, but there the costs can mount up too. 24 hour care can be more than £150,000/year (13). And again for perspective, your life expectancy from a diagnosis of dementia in your 60s – 6.7 years, in your 90s – 1.9 years (15).

Where’s my cradle to grave?

Too right, where’s the NHS and social care system in all of this? Broke, that’s where. Historically there were jobs that provided care and nursing homes for their retired workers as part of their payment plan (although I can’t imagine anything worse). Now the burden falls on the social care system. The boomer population is ageing, and everyone is living longer. Social care reform remains a political football as no side wants to try to tell people that their lifetime of NI contributions and tax wasn’t enough to pay for their care (16). The “squeezed middle” baby boomers (le sigh) are already paying up to £10k a year to look after their ageing parents, and this will only get worse (17).

To try and at least partially cover care home fees, the central and local Govs have created an Orwellian masterpiece of committees with opaque criteria to make decisions about who gets support and who doesn’t. It’s called NHS Continuing Healthcare when the NHS is involved, i.e. if there is ‘sufficient medical need’ (17). If you can’t qualify for that you get means tested by the local social care trust/ provider (18). AgeUK make a fair stab at explaining it on their website (19). I’ve seen people die before any decision on who will pay has been reached.

http_com.ft.imagepublish.upp-prod-eu.s3.amazonaws

The final stretch of this little essay is about the means testing that social care can use. It’s not actually free at point of care. The system used is fairly complicated in it’s own right, but the Money Advice Service has a good page breaking it down (18). Your income and capital are assessed. If you live alone, and in certain other circumstances, your home will be counted as part of your capital (18). The local authority can and will sell your home to pay for the fees, even if you don’t want them to (20, 21).

If the local authority deems you have deliberately disposed of assets, for example by gifting your child your home, to avoid paying means tested fees, it can claim them back. This quietly introduced piece of legislation is called Deprivation of Assets (22). The rules have subsequently got much tighter around gifting any asset; housing, jewellery, money, objects (23). As always, do your own research.

We can’t take it with us

To summarise, as a culture we fear death and avoid considering our own mortality or old age due to the association. This is a shame, as people are more active in their old age and living longer than ever before. We underestimate the costs and expenditure we will have in retirement. Old age will cost more than we collectively think. The last few years cost A LOT MORE. Don’t ignore your final years, embrace those calculations, and spend them in luxury if you can.

Have a morbid time!

The Shrink

References

  1. https://www.reddit.com/r/financialindependence/comments/8fyu65/do_longterm_care_costs_factor_into_your_fire_plans/
  2. https://www.millennial-revolution.com/freedom/early-retire-uk/
  3. https://www.newstatesman.com/politics/2014/10/hunger-filth-fear-and-death-remembering-life-nhs
  4. https://www.bupa.co.uk/health/bupa-on-demand/gp-services
  5. https://www.theguardian.com/healthcare-network/2018/may/22/south-wales-town-forged-nhs-points-future-tredegar
  6. https://www.reddit.com/r/financialindependence/comments/8zx7iq/health_insurance_as_a_barrier_to_fire_in_the_usa/
  7. https://www.ftadviser.com/pensions/2017/11/28/most-over-50s-underestimate-life-expectancy/
  8. https://www.madfientist.com/safe-withdrawal-rate/
  9. https://en.wikipedia.org/wiki/Trinity_study
  10. http://www.retirementinvestingtoday.com/2018/07/sobering-retirement-income-drawdown.html
  11. https://www.moneywise.co.uk/news/2018-07-03/savers-vastly-underestimate-the-cost-retirement
  12. https://www.moneyadviceservice.org.uk/en/articles/care-home-or-home-care
  13. https://bit.ly/2OiBuIN
  14. https://ukcareguide.co.uk/care-home-costs/
  15. https://www.bmj.com/content/341/bmj.c3584
  16. https://www.independent.co.uk/life-style/health-and-families/nhs-social-care-uk-reform-aneurin-bevan-health-poverty-andy-burnham-a8429571.html
  17. https://www.moneyadviceservice.org.uk/en/articles/are-you-eligible-for-nhs-continuing-care-funding
  18. https://www.moneyadviceservice.org.uk/en/articles/means-tests-for-help-with-care-costs-how-they-work
  19. https://www.ageuk.org.uk/information-advice/care/paying-for-care/paying-for-a-care-home/
  20. https://www.ft.com/content/34c336e8-3e5c-11e8-b7e0-52972418fec4
  21. https://www.telegraph.co.uk/finance/personalfinance/insurance/longtermcare/11441163/Why-you-WILL-have-to-sell-your-home-to-pay-for-care.html
  22. https://www.ageuk.org.uk/information-advice/care/paying-for-care/paying-for-a-care-home/deprivation-of-assets/
  23. https://www.which.co.uk/elderly-care/financing-care/gifting-assets-and-property/343063-what-are-the-rules-for-gifting-assets