Gordon Brown proposed a new insurance-based system yesterday to fund care for the elderly, the cost of which is forecast to reach £24 billion in the next 20 years. The Prime Minister said he wanted to free people from the fear that they would be forced to sell their homes to pay for care, and called the current means-testing system unfair for those who had saved. He revealed few details on how the new system might work, with his ministers saying that nothing had been ruled out except free personal care for all. That would be too expensive. They also stopped short of promising that the family home would be taken out of the equation altogether.
The current system, where anyone with a home or savings worth £22,250 or more gets no help with care home fees, is to be scrapped and replaced with one where everyone gets government help. That is likely to be a basic contribution from the state towards the cost of care. The new system would also encourage and reward those who have saved for top-up payments, such as matched funding up to a predetermined limit.
Equity release schemes, which allow people to use the value of their home to pay for care without selling it, would be explored. A deferred payments scheme, under which care home bills are settled out of the estate after death, would also be expanded. But the very poorest with no savings or assets would continue to have their needs met.
Mr Brown said that his aim was to make the system fairer for people who worked hard and saved for their retirement. “Of course, helping relatives is a challenge that most families rise to – however difficult it becomes,” he said in a speech to mark the start of a six-month public consultation on care
