£2.3bn NHS levy could revitalise social care

A report from the Intergenerational Commission has argued that the struggling social care system could be ‘rescued’ with a funding boost of £2.3 billion.

Incomes and Inequality considers a number of ideas to help fix the ‘broken’ intergenerational gap between millennials and baby boomers, recommending that every person in the UK should receive a £10,000 ‘citizens inheritance’, which could be raised by abolishing inheritance tax and replacing it with a lifetime limit for recipients of £125,000 before taxes kick in, and the introduction of ‘user charges’ on assets so wealthier individuals contribute towards their social care costs in England.

This NHS levy would introduce a charge on employee and self-employed National Insurance contributions on the earnings of workers over the State Pension age, raising £0.9 billion in 2020, as well as raising a charge that mirrors employee National Insurance contributions on private occupational pension income, but initially at half the main rate and with a higher starting threshold. The report strongly emphasises the need for ‘giving older generations the health and care they deserve, need and expect’.

David Willets, who chaired the commission, told the BBC: “We've got a very serious problem of ensuring there's a fair deal across the generations. Older people are worried about a properly funded healthcare system, people in middle age still haven't been able to buy their own home, and for younger people their pay is no better than it was 10 or 15 years ago. So the different generations in the UK all face different pressures. But we can tackle them, we can do something about it.”