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Savers on board with 'social care fund'

Several solutions for the care funding problem are said to be on the table, including the ‘Care Isa’ – a capped savings product, exempt from inheritance tax – and a 'care pension', which mixes drawdown and care insurance.

Meanwhile, the Lords Economic Affairs committee stated that to address the pressure facing carers and local authorities the government will need to provide £8bn a year in additional funding, rising in the coming years as the population with care needs continues to grow.

In their report on social care funding, published last week (July 4), the peers also suggested introducing an NHS-based system of free personal care so that those with long-term care needs can receive help with their daily activities.

Even though this may be more expensive than some alternatives, costing about £7bn a year, it could reduce demand for residential and health care by encouraging people to seek home care, they suggested.