Pensions  

Social care could be modelled on state pension

Social care could be modelled on state pension

Conservative MP Damian Green has proposed that social care provision should be modelled on the state pension, with taxpayers partially funding their care entitlement.

In a report published by thinktank the Centre for Policy Studies, Mr Green proposed the government should adopt the state pension as the explicit model for the social care system.

This would include universal care entitlement funded by taxpayers in a similar fashion to how the NHS works. 

The care people receive would have a cost attached which would vary according to where it was received and the type of care.

Under the proposals individuals would be entitled to a specified number of hours of care at home per week, or a place in a care home which includes a set level of service.

Individuals could then use their private pension to cover the remainder of the costs if a higher level of care is needed.

Rachael Griffin, tax and financial planning expert at Quilter, said: "Pension policy is far from perfect, but when compared to other areas of policy, such as social care, it is miles ahead.

"Today’s proposal from Damien Green applies the logic of the pension system and it’s easy to see why.

"Having a basic amount pledged from the state with private provision covering the rest splits the responsibility of care funding in a manner that is understandable and palatable to the public."

Mr Green said social care provision is currently unstable and will only get worse in the future if reforms are not carried out. 

There are 5.3m over-75s currently, a number which is set to grow over the coming years, which means an increase in demand for social care which the current system will not be able to cope with, he said.

Steven Cameron, pensions director at Aegon, said: "With an increasing number of us facing the prospect of needing social care in later life, the government needs to put in place a stable and sustainable way of sharing costs between the state and individuals, based on their wealth.

"Importantly, this must be fair and accepted as fair across generations and wealth bands.

"The government’s share needs to be adequately funded, ensuring good quality care across the country, with an end to the current geographical lottery.

"As our society increasingly enjoys longer lives, this inevitably comes at a cost. While this has proven particularly politically sensitive, we urgently need an open debate around how to pay for this, including the potential for increased taxes, earmarked for social care. Ideally, a new deal would gain cross-party support."

Other proposals to improve social care funding in the report included taxing the winter fuel allowance and redirecting savings from other parts of government in the forthcoming spending review.

If these suggestions do not work, as a last resort, Mr Green suggested asking the over-50s to pay an extra 1 per cent national insurance contribution.