The government is considering at least a 1% increase in National Insurance (NI) rates to improve social care and effectively tackle NHS backlogs, according to reports.
According to The Daily Telegraph, prime minister Boris Johnson favours a 1% increase in NI, which would affect around 25m workers and self employed people while the Treasury favours a 1.25% hike.
An even bigger rise could also be on the cards as The Times reported that health and social care secretary Sajid Javid wants a 2% hike.
However, writing in The Daily Telegraph, former health secretary Jeremy Hunt said a rise in NI contributions would disproportionately affect younger people and instead any increase should be applied to general taxation.
Downing Street has not denied reports of the 1% increase and justice secretary Robert Buckland told the BBC this morning that while he would not speculate on the rise, a “grown up conversation” about how to pay for rising social care costs was needed.
He added that the British public was sensible enough to know that when it came to the issue of social care, the country needed to find some way for it to be adequately funded.
The potential for capping costs on care, originally proposed by the Dilnot Commission into July 2011, has also re-appeared.
Matthew Connell, director of policy and public affairs of the CII, emphasised that a joined-up solution to funding later life care was much needed as it is now more than a decade on from the Dilnot Commission.
“Greater certainty on the cost of later life care will help inform and empower families to plan. The earlier in life people take steps the better financially prepared they are for later life,” he said.
“Research by the CII, involving 2,000 consumers in December 2020, found people who discuss care plans with their wider family are reassured from talking over the issues and coming up with a plan.”