“Given the huge funding gulf, the government should now take the opportunity to build both a political and public consensus around the need for a new ‘Social Care Premium’ to secure a fair and sustainable system in the long-term.”
Conservative MP Sarah Wollaston, chair of the Health and Social Care committee, argued there cannot be any more delays in “finding a fair and sustainable settlement for social care”.
She said: “Too many people are being left without the care and support they need and it is time for decisions to be made about how the costs are shared.”
The committees recommend that an independent body should be tasked with modelling requirements and providing the government with two-yearly forecasts.
Further funding reforms outlined in the report include levying an extra amount of inheritance tax on estates valued above a certain threshold and capped at a percentage of the total value.
This would enable the pooling of risk and prevent catastrophic costs to those receiving long term care, the MPs said.
Alistair McQueen, head of savings and retirement at Aviva, noted that like the NHS, the UK’s social care system is also celebrating its 70th birthday in 2018.
He said: “Unlike the NHS, this government - and its predecessors - have been slow to come forward with actions to address its funding crisis.
“There have been 12 government green papers over the past 20 years, yet decisive action has been absent. Other, more immediate, political pressures have seized the attention.
“Today’s report shines another light on the well-illuminated problem of social care. Many lights are on, but it remains to be seen if politicians and the government are yet at home.”
Nathan Long, senior pension analyst at Hargreaves Lansdown, argued the issue of “funding later life care is as monumental as that of having enough money saved for retirement”.
He said: “The key difference is that pensions have been tackled, at least in part, with the introduction of auto-enrolment.
“Social care is crying out for a similarly effective policy intervention, but with increasing awareness of wealth gaps opening up between the old and young, fixing the problems remains hugely challenging.
“Life begins at 40, but starting to tax specifically at age 40 seems fairly arbitrary. Those doing the right thing and saving for their future should make sure they do so tax efficiently. Money already stowed away in Isas and pensions still look to be a robust shelter from the winds of political change.”