Pensions  

Social care could be modelled on state pension

The report stated: "Using the latest available data on the income and tax paid from HMRC, there are about 7.9m taxpayers aged between 50 and 64.

"We estimate that they have a mean income of about £39,210 per year. The national insurance threshold was set at £8,424 in 2018/19, so the mean taxable income for these taxpayers was about £30,786. 

"A one per cent levy, which would mean an extra £308 a year for the average taxpayer between 50 and 64, would raise £2.4bn a year – enough money to cover the funding gap."

Mr Green suggests that people should be able to purchase a care supplement, which would be something similar to an annuity or insurance policy, which would ensure funds for more expensive care if needed. 

This money could come from individuals’ existing pension pots or lifetime savings or via equity withdrawal from people’s homes.

Ms Griffin said the problem with this is that often people do not realise how much they have to save for care in the future.

She said: "Worryingly, people often think the public purse will pay for their care or at least part of it. Even those that don’t are left scratching their heads as to how much they need to pay in before state funding kicks in. The whole thing leaves people confused and vulnerable.

"This is nothing new and is something the government has committed to tackling for years. However, to shift the current structure we need the government to deliver the social care green paper, which continues to be talked about as some sort of mythical being that never reveals itself."

In the March 2017 Budget, the government said that it would publish a green paper on social care, to allow a public consultation to be held. The publication of this paper has since been delayed several times since its original publication date of summer 2017.

The latest position is that it will be published "at the earliest opportunity".

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

There have also been calls for a 'Social Care Premium’, effectively a new tax on people over the age of 40.

amy.austin@ft.com