Create a 'state pension for care' to fund social care crisis, says Damian Green MP

30 April 2019
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Over 50s should pay a 1% surcharge on their national insurance contributions (NICs) to help fund the care crisis, says a new report.

The estimated gap in funding to pay for the social case system stands at £2.75 billion according to a new report written by former minister Damian Green MP, on behalf of policy think tank the Centre For Policy Studies (CPS).

The number of over-75s is set to double in the next 40 years, up from 5.3 million people currently.

As it stands there is little provision to help fund the ever-growing burden of social care, according to Mr Green.

The report argues that the care system should adopt the model of the state pension in order to develop more sustainable funding.

This includes the government providing a decent standard of care with a new ‘universal care entitlement’ while encouraging those who can afford it to top up this provision using savings or housing wealth via a ‘care supplement.’

The care supplement would function in the same way as private pensions do alongside the state pension. Individuals would pay the care supplement and receive a care ‘product’ back in return.

Mr Green argues that these products, unlike annuities or life insurance would not be allowed to pay out based on your health or family history of illness, but would instead offer a standardised level of care based on your contribution.

The former secretary of state says that providing mass products to the public would pool the risk to insurers and other providers, as not everyone would need access to the products.

By offering standardised products, the most expensive patients would be subsidised by the least needy.

Mr Green, who commissioned the much-anticipated social care green paper, has also called for over 50s to pay a 1% surcharge on their NICs to help close the gap.

However, Mr Green writes that such a measure should be considered as a “last resort” where other funding methods have failed.

Mr Green also calls for the winter fuel allowance to be taxed, and for savings made by the next government spending review to be diverted to fund social care.

Less than one in 10 (9%) of people are actively saving for care costs according to reasearch from law firm Irwin Mitchell.

It found more than half (60%) were not saving for care costs and had no plans to do so. 

Kelly Greig, head of later life planning at Irwin Mitchell comments: “The lack of knowledge about care fee costs, and the lack of action to plan for future financial arrangements, is worrying across all age groups. 

“What is most concerning is that people in their forties and beyond are the ones who are likely to have the most exposure to the care system, and yet do not think to plan for their own care – and as the stats show, nobody seems to have much of an idea of what an average cost would be.

“We know we have an ageing population and the social care system is already strained. In twenty years’ time it’s difficult to predict what the landscape will look like, but the signs are not looking promising.

“It feels like as a nation we are sleepwalking into a later life care crisis. There is no guarantee of what social care funding will look like in the decades to come, so why take the risk of not planning properly?”

Comments

In reply to by anonymous_stub (not verified)

I wonder whether the prblems of increasing social care costs will ever be resolved. I am very lucky to have two wonderful sisters, one of whom took responsibility for the care of both my late mother and father in the final years of their lives. My sisters were determined that our parents would not spend their remaining years in care and I will be eternally grateful to them for their selfless commitment. I fully appreciate that, for whatever reason not every family is in the position to take on this sort of responsibility. My main worry is that current government thinking is almost based on an acceptance that, because of an aging population social care is inevitable for everyone beyond a certain age.For instance, I wonder what actual research is currently being undertaken on any correlation, especially in the elderly population between such things as diet, lifestyle, exercise and long term prescription medication use and the likelihood of future care needs. I suspect that a lot of elderly people could improve their own future health and care outcomes by taking more responsibility for the decisions they take for themselves on a daily basis.

In reply to by anonymous_stub (not verified)

Wouldn't we all be better off if the government managed the money received from taxpayers properly. They seem to be footloose and fancy free with this - giving themselves pay rises and putting in ridiculous expense claims to name a few. As a 58 year old single woman I have had to bring up my child, pay into my own pension, pay my own mortgage, pay prescription glasses for my every failing eyesight, pay for prescriptions for life long conditions, pay to visit the dentist - all of this whilst paying income tax for the past 42 years of my working life. I am not in a highly paid job and have had to scrimp and save. Why does the government think it's ok to continue taking more and more from us. We will have no quality of lift if we get to retirement age - especially as pension forecasts are not looking good. They need to do as the rest of us and do without if you haven't got it.

In reply to by anonymous_stub (not verified)

Masses of encouragement to invest in a pension and save for retirement, contradicted by Lords, Ladies and politicians who are scheming to take it away.

Social care

I wonder how many old people can afford to pay for care?l thought l was living a very healthy life(non smoker non drinker never had dealings with drugs very clean living)so now l find myself living with 31 long term chronic illnesses,and in palliative care,being on pension credit l cannot afford to pay for care,my social care costs swallow up all my disability payments, (local council refuse to except my disability expenses) am l on a healthy diet you may ask?the answer is yes because l follow a strict diabetic and celiac diet,l have both conditions nhs continuing healthcare is denied,as my health needs are deemed to be social care needs,by the NHS l am still fighting for CHC at present,so at 72 years old l can say l am a pensioner in poverty,and there are many more out there like me,do the house of lords live in the real world?.
Valerie Bradley

Social Care

Those who work pay NIC, Prescriptions etc. are being used as the money makers to fill the gaps in the shortfall. We keep going on about the NHS/Social Care and lack of funds, because, wait for it 'people are living longer'. We should do a breakdown because those who work aren't the ones living longer. This can be easily resolved if we do what other countries do and ensure people pay their way. Put something in place to stop the tourist NHS users and follow it up with check or get a UK family member to provide the upfront cost which they can get back from that person. Those who come into the country just to use our NHS system should pay and that money could be used to fund the Social Care of this country. Damian Green MP and most MPs make statements about putting money aside for the future. The only people who can put money aside are the workers (yes the workers again). So not only do the workers fund everyone else (those who believe everything is for them and free) you now want them to fund the Social Care, because lets be candid here, those who don't work and are on benefits will not be putting to this fund, or am I wrong? So we have a system that is for everyone, but the only ones who benefit are those who don’t paid, don’t work, but you want the workers, for example, to fund for their old age, (which is about 67 now before they can retire, if they last that long). You tell me how this is a fair system. Stop depending on the workers to get you out of a hole you have allowed to be created because people don’t wish to upset people, unless you are a worker. You should be looking after the workers not those who don’t work and have never worked, and those who come in just to use the NHS and leave without paying their bill.

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