Everyone over the age of 40 could be expected to take out insurance to cover the cost of their care in later life, under radical new plans being drawn up by Government ministers.
According to Whitehall sources, the Government hopes individuals will take more responsibility for funding their care and lifestyles in later life – otherwise a tax or increase in national insurance contributions looks inevitable.
The ongoing social care crisis, compounded by an ever-aging population, means that public funds are falling well below the levels needed to support frail elderly people who need help with washing, dressing and other activities if still at home or in a care home.
Ministers briefed the Guardian this weekend to outline plans that are being examined by Boris Johnson’s new health and social care taskforce and the Department of Health and Social Care.
It is thought that the plans gaining support as the Government wrestles with the perennial question of who should pay for social care.
A tax for over-40s to meet the cost of a reformed system of care for the ageing population is now a front-running solution to meet the Prime Minister’s pledge just over a year ago to “fix the crisis in social care once and for all”.
The Guardian reports that while social care is a devolved matter, the plans could apply to the whole of the UK as they may involve the tax system.
Steven Cameron, Pensions Director at Aegon, said that the COVID-19 pandemic has made it “even more imperative” that the UK solves the social care funding crisis.
He said: “Finding a fair and sustainable solution will inevitably involve a sharing of costs between the state and individuals, based on their wealth or income. Introducing an additional band of income tax or National Insurance ring-fenced to go towards social care costs is worth exploring and would mean those on higher earnings pay more into the fund.
“Applying the new tax to those above, say, age 40 may raise questions over intergenerational fairness and the Government needs to look at the wider support it is offering for each age group.
“While paying more tax is not going to appeal to everyone, homeowners might see it as a price well worth paying if it came with a cross-party lifelong guarantee that in return they will not have to sell their home to pay for future social care.”