Steven Cameron has said it’s important that the government comes up with a stable and sustainable way of funding social care as it is often costly, but the Queen’s Speech has offered no clarity on this.
Cameron said the government needs to gain public and cross-party support for a deal to share costs between the state and individuals, based on their wealth, which also needs to be fair across wealth bands and generations.
He said: “The government’s share needs to be backed up by sustainable and adequate funding, accepting this may involve raising taxes either on income or wealth. This is further complicated by the government’s 2019 election manifesto ‘triple tax lock’ commitment not to raise rates of income tax, national insurance or VAT.
“It could explore options concerning wealth taxes, or extend National Insurance to earned income above state pension age, which is currently exempt. Another option would be introducing a completely new tax, earmarked specifically for social care, possibly levied on those above a certain age.”
Whatever solution the government decides on, people will still need to think about saving for their own care as whatever the government offers is unlikely to cover all costs, said Rachael Griffin, tax and financial planning expert at Quilter.
She said: “Personal provision for social care will make up the vast majority of how someone pays for the care they need, and it certainly won’t be a small amount so people should think carefully about not only saving for retirement but also for social care.”
The industry has previously come up with a number of suggestions, including a Care Isa and Care pension, but these were not picked up by the government at the time.
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