£30-a-month care premium would meet a fifth of National Care Service cost

A pension-style premium for care, starting at 40

LCP, a pensions and actuarial consultancy, proposes that people in England aged 40 and over, pensioners included, be enrolled in a social care premium unless they opt out (opens in a new tab). Under LCP's proposal, the most anyone would pay is just over £30 a month, which LCP says is equivalent to a 1p rise in the basic rate of income tax (opens in a new tab).

LCP's modelling puts the yield at about £3.5bn a year, even after people opt out (opens in a new tab). LCP sets that against an estimated £17bn a year for a full National Care Service by the mid-2030s (opens in a new tab). On its own numbers, the premium would cover about a fifth of the bill.

That matters to policymakers weighing how to pay for care, and to commissioners, because the same report would change who qualifies for council help. It is an independent proposal, not government policy, co-authored by former UK pensions minister Steve Webb, now a partner at LCP.

The bigger change is who would qualify for help

LCP also proposes raising the means-tested asset threshold in England from £23,250 to £100,000 (opens in a new tab). Some of the extra money would go on home adaptations, falls prevention and support for unpaid carers.

This is the part that would reach furthest into the market. People with assets above the threshold pay for their own care today. Lift it that far, and in our view many people who now pay privately would move into care that councils commission.

Commissioners would then arrange care for more people. Providers whose income leans on people paying their own fees would feel the shift most.

Stay in for 25 years and your care costs are covered

People who stay in would build a discount on their own future personal care costs. According to LCP, the discount rises by 4% for each year of contributions until it reaches 100% after 25 years (opens in a new tab).

The case rests on risk. LCP estimates that one in seven people face lifetime care costs of more than £100,000 (opens in a new tab), and it wants that risk shared across a larger group.

Money people can opt out of is money nobody can count on

Webb puts the yield at "around £3bn-£4bn" even on a purely voluntary, opt-out basis (opens in a new tab). The co-author offers a range, so the single figure in most coverage is a midpoint, not a promise.

That is the weakness. Calling the premium equivalent to a tax rise invites people to treat it like a tax, yet unlike a tax they can walk away from it. How it would be collected, how opting out would work, and what happens to people with little or no taxable income have not yet been set out.

The proposal lands in a live argument about how to pay for free care, covered in our earlier report on how a national care service would be funded. A premium that covers a fifth of the bill, and that people can choose not to pay, still leaves government to find the rest.