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In proposing his General Theory of the Third Age, Laslett (1991:153) recognised quite bluntly, that the Third Age carried with it the eontinuing but unpredictable certainty that

‘dying becomes so much more probable’.

This uncertainty about possible length of human life is of considerable symbolic significance for elderly people, who live in a state of perpetual doubt. They never know how much time they have: whether to begin this or to promise that; whether to plan for several years hence or at most for a month or two. They cannot tell if they should cling on to their capital, and persist in habits of saving ‘just in case’, or if they should spend while the opportunity lasts: they have great difficulty in deciding how much they should give away in their lifetimes, possessions as well as money, should money be at their disposal. (Laslett 1991:13)

He suggests that the transition from the Third Age to the Fourth Age is probably the most difficult of all during the life course, yet it is the least predictable.

Since no one can choose the moment of the onset of final decline, the ageing of a person, especially in the biological and social sense has an importance for the transition from the Third to the Fourth greater than at any previous stage o f the life course. This is because everyone in the Third Age, especially when he or she is threatened by the Fourth, ought to be aware of when and how to withdraw. (Laslett 1991:153)

There are three potential money management challenges which face the individual in moving from the Third Age to the Fourth Age. The first is the possibility of loss of independence

through physical disability or cognitive impairment and the requirement for continuous personal care which may require payment. The second confronts the wealthy in that their personal fortune is subject to Inheritance Tax, and so a percentage of their life eourse acquisition of wealth may not pass to their chosen heirs. The third and most predictable cost is that of funeral expenses. Each will be discussed briefly in the following sections.

3.7.1 Maintaining independence and personal care costs

Wilson (1993) studied the transition from the Third to the Fourth Age in detail when she carried out an empirical study of people over 75 in North London, some of whom had retirement incomes and savings ‘significantly above the poverty line’. She has a clear,

praetical definition of later life based on levels of individual independence. The first level is a continuation of Third Age activity, which is complete freedom of action without relying on others for more than normal services.

From a positive viewpoint independence can be defined as the ability to make choices and act on them without any extra assistance. For example,

independence is associated with the ability to drive a car, to use publie transport, to shop when and where one chooses, to decorate the house, or to visit fiiends whenever one wants. A degree of eontrol over one’s life and an adequate income are important ingredients in determining levels of

independence. (Wilson 1993: 47)

A second level of independence, which she calls ‘autonomy’, retains individual independenee and quality of life but may rely on other people to provide basic services.

First as with independence, autonomy implies freedom from coercion by others. Second the support needed to carry out decisions must be available as and when it is needed. Third there must be some means of reciprocating help received. (Wilson 1993: 49)

The comfort and convenience of the services provided for the individual depends to a large extent on the form of reciproeation available. Wilson (1993) provides an example, drawn from her research, of the alternative transport methods available to those no longer able to drive. Those with no finaneial restraints ean use a taxi service or hire a driver whenever they require transport. Others may be able to use a subsidised taxi service or Dial-a-Ride serviee or they may depend on a neighbour or family member. She eomments that ‘not all {forms o f

transport] are equally conducive to autonomy.’ (Wilson 1993: 49)

Wilson (1993) concludes from her research that in order to retain autonomy in later life it is essential to have a good income so that the necessary services can be purchased in

order to maintain individual quality of life. She also suggests that older people have a sense of money management that may not be possessed by subsequent generations.

Money is of vital importance to successful ageing, even though few elders feel free to say so. In terms of maintaining independence and autonomy the main contribution made by money is in giving access to a deeent standard of living. This is true even though many old people are able to maintain their self- respect and independence on less money than younger generations might think necessary. (Wilson 1993:63)

Wilson diseusses an additional advantage for those who received a good income and had ‘financial power’ during their life course since they were more accustomed to paying for household services and could carry on doing so in later life. They are therefore able to adapt to continue autonomous independence longer than those with less ‘financial power’.

In this study there is evidence that a life time of finaneial power is

advantageous because it builds up expectations of autonomy and the habit of buying goods and services as they are needed. This is undoubtedly important when services beeome necessary, for example, those who have always employed gardeners will go on doing so. (Wilson 1993: 62)

Arber and Ginn (1993) also observed the process of passing from an active Third Age to autonomy and dependency. They too conclude that those with the resources are more able to retain an autonomous independence but others may become fully dependent more quickly. To them the proeess is yet another example of the elass system supporting the financially secure:

Class is directly associated with the material, financial and cultural resources neeessary to enable an elderly person to remain autonomous within their own home; those who lack resources, including access to caring resources are most likely to experienee entry into residential care, which is usually characterised as representing a marked reduction in the elderly person’s autonomy and independence. (Arber and Ginn 1993: 149)

Laslett (1991), despite his enthusiasm for continuing with positive Third Age attitudes for as long as possible, had to accept that the Fourth Age was a reality.

The biologieal and medical uncertainties of the length of the Fourth Age, now and in the future pose the most serious of all difficulties in the way of accepting the suggested theory of the life course and of the Third Age. (Laslett 1991: 154)

The ‘serious difficulty’ of the Fourth Age imposing it’s ‘uncertainties’ on the continuation of the Third Age is exacerbated, particularly for those who have assets, in that there is an

Chapter 2 (Section 2.4.4.vi) that the National Assistance Act 1948 which contained many aspects of the Victorian Poor Law, is still the legislative basis for the provision of care and support for the incapacitated elderly. This problem was the subject of the Commission on Funding Care and Support (Dilnot Commission) which reported to the UK coalition

Government in 2011. The Chairman’s summary provides a succinct resume of the difficulty: At the age of 65, the future costs of care are unpredictable. Around a quarter of people aged 65 will face no significant care costs over the remainder of their lives, while around one in ten people face future lifetime care costs of more than £100,000. (Commission on Funding of Care and Support 2011: 25)

The Report noted that the present system, which administers care and support for those in the Fourth Age that require it:

is not fit for purpose. People are exposed to very high costs, which they are unable to protect themselves against. The system is

confusing, unfair and unsustainable. People are unable to plan ahead to meet their future care needs. Assessment processes are complex and opaque. Eligibility varies depending on where you live and there is no portability of assessments if you move between

local authorities. Provision of information and advice is poor. Services often fail to join up. All this means people can experience poor outcomes and face considerable distress. (Commission on Funding of Care and Support 2011: 25) The Report assumes that those who have carefully managed their money during their life course in anticipation of a long continuation of a Third Age would normally try to protect themselves hy buying insurance. The Dilnot Commission goes on to say:

Under the current funding system, there is no way individuals can protect themselves from potentially very high care costs by pooling their

n&ks,.\i.e.taking out an insurance policy] People can lose the majority of their

income and assets paying for care. Those entering residential care are often forced to sell their homes. This is widely perceived by the public to be unfair.

(Commission on Funding of Care and Support 2011: 25)

The ‘public’ who consider that the current situation is most unfair could be those who are expecting to inherit a legacy from their parents or other relatives.

3.7.2. Inheritance tax and lifetime gifts

It was noted in Section 3.7.2 that those in certain occupations may pass their family business or intended inheritance on to the next generation while they are still alive. This is not only for business efficiency purposes but may also solve a Fourth Age financial conundrum. By

passing wealth down to the next generation in the form of a life time gift, it may be possible to avoid inheritance tax which is payable from the estate of the deceased if it is worth over £325,000 for an individual or £650,000 for a married couple in 2012 (HMRC 2012-2013). The conundrum is that inheritance tax is only avoided if the donor does not die within seven years of the date of the gift. This situation is a good example of the underlying challenge for all Third Age money management. The task is to find a balance between retaining financial resources for possible future long term care, sharing wealth in the form of gifts with children or grandchildren or spending on personal comfort and pleasure. All of these possible uses of wealth are prefaced by the uncertainty of not knowing how long their own Third and possible Fourth Ages will last.

3.7.3 Funeral Costs

A predictable cost which occurs at the end of the Fourth Age is for a ftineral. These fees however, can he more easily managed. The researcher regularly receives a publicity mail shot from his car insurance company which urges him to pay his ftineral expenses by direct debit during the rest of his life course.

In 1985 Dignity launched the first funeral plan to be offered in the UK and they have been the market leader ever since. More than 480,000 people have now seen the benefits of having a funeral plan with Dignity. This experience really has given them a unique understanding of customer’s needs and has allowed them to create the most financially secure funeral plan available in Britain today.

(Liverpool Victoria Insurance Company, publicity leaflet, 2012) The leaflet reveals how fiinerals have changed with modernity two and become consumer items, professionally administered to a market determined standard, but at the same time providing a guarantee ‘to cover the full cost of a traditional cremation funeral’.

3.8. Summary

Retirement as a fully defined stage in the life course gradually developed during the twentieth eentury in parallel with the life course of those now in retirement. The demographic reality of people living much longer after retiring was recognised early in the twentieth century. By the

I930’s the problem of providing ineome in retirement had become a political issue. An

answer to this problem was proposed in the Beveridge report of 1942 and implemented by the National Insurance Act 1946. The state pension was intended to prevent impoverishment but not to provide a ‘lavish’ income. At the same time those with moderate to substantial

contribute to occupational pension schemes which would supplement their state pension and provide additional income in retirement.

As the problem of lack of post employment ineome was gradually resolved for the majority of people in the UK, attitudes towards retirement itself began to ehange. It became recognised as a positive stage of the life course, defined by Laslett (1991) as the Third Age. Retirement also beeame used by employers as a means of reducing and restructuring the work force. Early retirement i.e. before the male state pension receipt age of 65, became relatively common in the late twentieth century and early 21st century when the current Third Age eohorts began to retire.

Although the state pension only provided a modest income as intended, occupational pension schemes which were started at the commencement of careers in the 1950s and 60s were enhanced by sustained growth in stock market based pension funds, particularly in the

1990’s and the early 21st century. Pension ineomes inereased by 50% during that period (ONS 2012b). However, as Willetts (2010) noted those who joined an occupational pension seheme before the late 1980's were most likely to have contributed to a defined benefit, DB final salary scheme. Willetts and other commentators considered DB schemes to be a much safer and more rewarding seheme than the defined contribution, DC schemes which were much less effective in producing a reliable inflation proofed income.

Young adults who formed households in the 1950’s and 1960’s and were able to purchase their own houses at the commencement of their careers would also have benefited fi*om house price increases. These factors particularly have added to the wealth of the current Third Age, who may also have received tax free retirement lump sums and legacies.

The life course of the current Third Age has been subjeet to the strong influence of consumer and market values which were introduced in the 1960’s and 1970’s after a period of rationing and strict consumer controls. The introduction of easily available credit to consumers since the 1970’s was at a period when the eurrent Third Age were establishing their households and the supply of consumer products was increasing. Credit cards and credit would have been readily available to those with average and above average incomes. At the same time methods of controlling and managing household finanees were ehanging with the introduction of digital technology to banking and the advent of the home computer. In recent years the computer has changed methods of purchasing goods and services which can

increasingly be obtained without the customer leaving their home.

The possession of wealth for those now in the Third Age provides them with a choice on how it can be used in their later life course. Third Age wealth could be used in an

intergenerational exchange to assist adult children and grandchildren with tertiary education fees which they themselves did not require. Similarly it was noted that young adults in the 21st Century often require help for property purchase from, as Willetts (2010: 223) described it, ‘the bank of mum and dad’. If buying a first property remains expensive for young adult grandchildren they may need to call on the bank of ‘grannie and grandad’.

Although the life course of the current Third Age has been shaped by the radical social changes imposed by the 1946 to 1951 Labour government, one aspect which remained almost unchanged from the Victorian era was social care, which left the individual solely responsible for providing facilities and ftmding for their later life or Fourth Age. This situation still prevails in the 21st Century so that those now in the Third Age need to decide whether they can dispose of their wealth through intergenerational exchange or whether they will have enough to pay for their own personal care if their situation should require it.

The laek of a clear government policy on later life care could, as the Dilnot Commission (2011) pointed out, leave the individual impoverished at the end of their life which was what Beveridge and his supporters were trying to avoid.

Chapter 4. Methodology

4. Introduction

This chapter considers the research methods that were used to collect the data for the study and its subsequent analysis. The main research aims are restated together with examples of research questions that were used to guide the research. The chapter then sets out the requirements o f the research process and argues that qualitative interviewing was the only method that could have achieved the aims of the study.

The sample and how it was acquired, its size and characteristics is then discussed, followed by the interview process including developing questions and the interview guide with an outline of the questions that were asked. The ethical requirements that underpinned the work are then examined. The final section discusses the reasoning behind the chosen method of analysis and the changes of approach that were made as the analysis progressed.