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Govt may introduce £12,000 Long Term Care levy

Elderly Britons may be forced to pay a £12,000 ‘inheritance levy’ to help fund old age care, according to reports.

The Department of Health will soon release a green paper discussing options for elderly care in the future. The Daily Mail says this will include a proposal for a one-off fee paid on retirement or deducted from the estates of elderly after they die.

Currently, anyone with savings above £22,250 has to pay for care but the discussion paper will set out reforms to meet the growing cost of care as well as the growth in elderly population.

A spokesman for the Department of Health says: “We won’t comment on the content of the green paper before it is published. But it will set out ways to reform the care and support system so it is fit for the needs of an ageing population and changing expectations well into the future. People all around the country will be able to have their say.”

Symponia managing director Janet Davies says any decisions made by the Government will end up with someone paying out.

She says: “Whatever the Government finally decides, it will not be able to afford, so will need money from somewhere. It cannot afford to pay for everyone’s care in the future, which is a problem that’s never going away; we are all living longer and people will be getting even older in the future.”

Davies says aside from a one-off levy, the Government may decide to tax younger people, or create a partnership scheme or even may decide to resurrect the old-style pre-funded care plans with the help of the insurance sector and IFAs.

She says: “It would not be unreasonable for the green paper to announce mandatory taxes, but it’s only a consultation paper which will eventually lead to a white paper, so no decisions will be made yet. But we will have an election soon and this will put elderly care back up on the top of the political agenda.”

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