There will be cracks in care funding – that’s how the light gets in.

Today we have had it confirmeded that in exchange for a substantial increase in national insurance – to fall on those in work, those past work will be comforted that they will have their care fees paid for them, save for a substantially improved means test for those who will get state funding for Care and a cap on care costs for those who have a substantial care liability.

This is how the IFS have reacted to the news

The newshas brought outrage from Tory backbenchers ( a manifesto pledge broken – a step to socialism etc.) and from the left (a tax on the young, the poor and the hard working families).

A more reasoned comment was made on my recent Facebook post from a man who once was the Government Actuary charged with balancing national insurance payments with pay-outs.

disagree on NI taxable base funding long term care of the baby boomers using NI Unless changes are made to
(1) NI base and self employed rate
(2)have a direst link between NI and care spending.
The first is in all minds.
The latter is less well covered. Part of NI is allocated to NI fund and pays state pensions and a few other benefits. Clear hypothecation.
The other 20% is called NHS allocation but does not affect NHS spending. It is simply a tax. Mustn’t happen to social care NI.
And this is not the time to introduce a large new inter generation transfer from poorer young to richer old.

That introduces some signal to the noise and I agree that without clarity on spending, national insurance remains (in the public eye and practice), part of general taxation.

The detail matters

My friend’s views and those of Torsten Bell usually coincide and it came as no surprise to find Torsten leading the charge against the intergenerational transfer. He considers raising money to meet rising care bills an unambiguously good thing

It is Torsten’s third point that is most problematic for those on the left. This may not just be an intergenerational transfer, but a transfer from the poor to the rich, happening at the same time as universal credit is being cut,

Taken together, this looks like cuts to the poor to featherbed the rich, something we found out about following the financial crash in 2008.

What to look out for today.

As I have made clear already, I am not against inter-generational transfers, I do them all the time to ensure both children and parents are ok. Most boomers do the caring thing, either financially or with their time and they do so out of love. The love comes back and this- to use Torsten’s phrase, this NI hike is  “socialising” common practice.

But the way in which the benefit to those in later life (and those who support them) is managed is crucial. Here’s Torsten again.


Raising the floor , protects those who have modest savings and modest equity in property while raising the cap, protects wealth. But wealth protection schemes are common and freely available to the wealthy through insurance and through other aspects of wealth management, it’s what made SJP famous. The protection of those with just enough to get by, from the consequences of £4,000 per month nursing bills, that is the proper business of the state.

The Treasury has a really hard task on its hands, not to be seen to be pandering to the wealthy (and to Tory Backbenchers), nor to be hammering the poor (2008+ style) and its why no Government either Tory, Labour or Coalition has taken on Care.

This is the time when we take a deep intake of breath and hope that what comes out of today’s announcements gets that balance right and pleases the public. Whatever comes out will not please the experts because the experts can see the crack in everything. They forget sometimes that that’s how the light gets in.

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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1 Response to There will be cracks in care funding – that’s how the light gets in.

  1. John Mather says:

    The real question is why do half the working population pay no tax? The productivity of the U.K. is a major factor. More duck tape solutions offered today.

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