Pensions and investments firm, Aegon, is calling for a stable and sustainable way of sharing social care costs between the state and individuals, based on their wealth.
The plea comes ahead of the Queen’s Speech on 11 May, with is expected to include a Bill on Social Care and its funding, marking the start of detailed consultations and plans.
Aegon said the government’s share of costs must ensure fair rewards for carers delivering good quality care across the country, with an end to the current geographical lottery and improved co-ordination with the NHS.
Stephen Cameron, Pensions director at Aegon, said: “Delivering a fair and sustainable social care funding deal remains one of our greatest societal challenge. The government needs to gain public support for a deal which is fair across wealth bands and generations. Research carried out by Aegon shows strong support for the costs being shared between individuals and the government, with a cap on overall personal contributions.”
Meanwhile, individual contributions must be made clear and capped to incentivise people to plan ahead for their care, Aegon said.
It warned that public is “crying out for clarity” to enable them to plan their finances accordingly, and explained that knowing what their personal contribution to care costs might be, subject to an overall limit or ‘cap’, would help people with their future planning.
The company added that the government may need to raise taxes on either income or wealth in order to raise adequate funding for social care.
However, the Chancellor, Rishi Sunak, has recently agreed to maintain the Conservatives’ ‘triple tax lock’, which stops him from raising the rates of income, national insurance or value added tax.
This mean the government may explore options concerning Capital Gains Tax or Inheritance Tax to raise funds.
“Another option could be extending National Insurance to earned income above state pension age, which is currently exempt. A third would be introducing a completely new tax, earmarked specifically for social care, possibly levied on those above a certain age,” said Cameron.
“Individuals also need incentives to ‘do the right thing’, which is why those who do build up savings shouldn’t face unlimited personal contributions. We strongly support a cap on how much any individual will be asked to pay for care costs and clarity on any separate charges for ‘room and board.”