Most people think of long-term care as something that happens to other people, if they think of it at all. The reality is that only a minority of older people will ever need full-time residential care, but for those who do, the cost can be ruinous: around £800 to £1,500 per week, and potentially £150,000 to £250,000 over several years.
If your assets fall below £14,250 in England, the council will pay for most of your care. For those with assets above that, the value of property is the first asset assessed when determining what you can pay. There are exceptions, but many people will need to sell their home to cover care costs. This hits the middle class hardest, as their wealth is generally tied up in property rather than income.
Most recent governments have looked at ways of funding long-term care. Several have run commissions, many of which have offered workable frameworks. But every proposal has involved raising taxes, limiting inheritances, or both – politically unpopular options with no clear, immediate benefit to the public, and, I believe, that is what has stopped a decision being made.
We talk a lot in the pensions world about helping people prepare for care, but the insurance products that would support this are not widely available. Many people who need care are seeing their finances drained and are being forced to sell their homes. The fact is, individuals cannot shoulder the cost of care. It is simply too high.
For a cost like this – similar to the NHS, the State Pension, and unemployment benefits – we need a national, compulsory funding system. Everyone could contribute a small amount throughout working life to protect against care costs in old age. In practice, that would mean higher taxes for a benefit most people will never personally use. But that is true of many collective benefits.
However, unlike the NHS, which offers visible and immediate care, a long-term care fund would be invisible to most voters. Few will support paying extra tax for something they may never need. And politicians, sensitive to short electoral cycles, would struggle to sell a tax policy for an abstract risk.
But that is precisely what collective welfare exists for, to share unpredictable costs that no individual can bear alone. Social care is not a luxury; it is a public good that safeguards dignity, prevents family breakdown, and supports health services. The longer reform is deferred, the heavier the cost will fall on the next generation of taxpayers and carers.
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