The Social Care Premium – Should over-40s pay for old age care?

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The Social Care Premium – Should over-40s pay for old age care?

By Mark Fairlie

MPs have called for a new tax for Brits aged over forty to help pay for elderly care in the UK.

As many as nine in ten MPs believe the social care system is “not fit for purpose” and that funding this should be a top priority for the government.

What has been proposed?

Politicians from across the country have suggested a solution as laid out by the Nuffield Trust. The health policy think tank proposed a plan for UK to implement a dedicated social care tax paid for by the over 40s.

This idea is nothing new, in fact, similar legislation already helped Japan solve an elderly care crisis in recent years. The Nuffield Trust argued in their report that many of those now entering middle age would be willing to pay such a levy as they worry about their ageing parents and their own future.

Since Japan introduced the new tax for the over 40s, expenses such as care homes and exercise classes for the over 65s has become much more attainable.

Sources say that the rising demand of elderly care has meant that tax bills for the average Japanese citizen over forty years old has more than doubled since the year 2000; reaching the equivalent of £444 a year.

However, since a third of the Japanese population is expected to be over the age of 65 by 2040, it can be argued that the additional tax is necessary to fund this change.

Two House of Commons’ committees also added that retired people should also be made to pay the Social Care Premium tax if they have lucrative pensions or investments, helping to fund care for those with lower income.

How does social care currently look in the UK?

Currently, help towards the cost of care is only available for the very poorest percentage of the population. This is also usually provided to those in people’s homes and care homes.

Those that do not fall into this bracket must pay for elderly care themselves; with 10% of retirees facing lifetime costs of more than £100,000.

On top of this, an increasing number of people are relying on physical care from friends and family, with many others forced to go without any support at all. This could be anything from assisting with washing and dressing to help in taking medication.

MPs within the Housing, Communities and Local Government, as well as the Health and Social Care Committees, have said that changes are long overdue in the social care system.

The Social Care Premium – Should over-40s pay for old age care?

Why is there a problem?

Head of the NHS Confederation Niall Dickson told BBC 4’s Today programme that the care system is struggling to cope with “huge amounts of extra demand” due to there being “many, many more” older people in the UK.

Between 2005 and 2015, the number of people aged 65 and over in the UK increased by 21%, where the number of those aged over 85 rose more than 30%, says the Office of National Statistics.

Other data from the Office of National Statistics show that the average life expectancy in the UK has risen significantly in recent years. In the decade between 2006 and 2016, the life expectancy for males rose from 77.44 years to 79.46, with the average for women rising from 81.7 years old to 83.08.

Whilst the change may not appear drastic for some, it has greatly increased the number of people in the social care system. Other research also found that in 2016 there were 199,305 people in nursing and residential homes, with a further 452,990 people accessing long-term community-based care funded by their local councils.

Age UK recently warned that 1.2 million older people in the UK currently have unmet social care needs due to this demand. Think tank the King’s Fund says the number of older people getting state-funded help in England alone fell by 26% between 2009 and 2014. They said that social care for older people is “under massive pressure”.

MPs call for future funding

The British Medical Association (BMA) added that it is “shocking” that the government does not already have a plan in place, noting that the underfunding of social care directly contributes to the health service crisis each winter.

Since then, groups from across all parties in the UK have said a radical solution is the only way to tackle the problem; by implementing a care levy for the over 40s.

MPs believe this change could lead to everyone in the UK being able to access free care, although those in care homes would still have to contribute to their accommodation costs.

Chair of the Health and Social Care Committee, Sarah Wollaston, said that

“we can no longer delay finding a fair and sustainable settlement for social care. Too many people are being left without the care and support they need and it is time for a decision to be made about how the costs are shared.”

The government have said they will publish a green paper on social care later this year potentially reviewing the proposal.

Caroline Abrahams of Age UK is in full support of the plan, saying that whilst the idea of paying more tax was a “bitter pill, it just might be one worth swallowing – but only for a system that we can all rely on.”

By | 2018-06-29T08:16:03+00:00 June 28th, 2018|Personal Finance, Politics|0 Comments

About the Author:

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Journalist, Mark Farlie, provides cutting edge articles with a focus on plain English & zero jargon. With a breadth of interests, Mark writes on topics such as; personal finance, commercial finance, B2B, marketing, law and technology.

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