Boris Johnson Mulling Over Raising Taxes To Fund The Cost Of Social Care

  • Jul 27, 2020 AEST
  • Team Kalkine
Boris Johnson Mulling Over Raising Taxes To Fund The Cost Of Social Care


  • PM mulling over options to resolve the ongoing social care crisis in the country
  • UK citizens aged 40 and above could be taxed to pay for the same
  • Similar taxation laws are followed in Japan and Germany

As per expert estimates, the cost of social care in Britain is projected to rise by an addition sum of £7 billion every year. Johnson had promised to bring out a comprehensive set of social care reforms more than a year ago, in June 2019.

He said that he would end the hardships that the older people have to face when they are short of money to finance self-care and are forced to sell their home for the same. The PM is faced with mounting pressure from healthcare authorities and local councils to hasten the reform process, especially in the wake of coronavirus crisis. They have asked the British government to publish a reform timetable in this regard.

According to research, people aged more than 70 years are more prone to catch the coronavirus infection.

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James Jamieson, Chairman, Local Government Association told that there is a need for a complete system overhaul and the future of social care needs to be secured.

People with more than 40 years of age might have to pay an additional levy to cover for their social care cost in the years to come. This could be in the form of an insurance premium or a tax, according to official sources.

This money would be able to cover the cost of expensive care (more than £1,400 every week), for critically ill senior British citizens. It could also be used to fund stay in care homes or home visits to do the daily chores for the elderly people. The idea is being promoted by Matt Hancock, UK Health Secretary. PM has requested the new health and social care taskforce and the Department of Health and Social Care to review the suggestions.

The main question is the timing of this reform. Treasury is opposing the move, probably because the government is already running very high public debt, to fund the economic costs of the all-encompassing coronavirus pandemic.

On the sidelines, Sir Simon Stevens, Chief Executive, NHS (National Health System) England also said that Britain needs to urgently resolve the issue of providing high-quality social care for the elderly, with a feasible plan.

Inspired by other nations

Such taxation patterns are being followed by countries like Japan and Germany as well.

For instance, all the working population contributes equally towards social care (equal to 1.5 per cent of their salary), as soon as they start working in Germany. Employers contribute an equivalent amount as well.

People aged 40 and above pay for social health care in Japan, on the other hand.

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The current social care system

To avail of a free social care service at your home, the current healthcare regulations in the UK recommend the following:

  • You qualify for it in case you have less than £23,250 as your total capital balance (apart from the home you live in)
  • You can get an at-home social care in case you do not own a house
  • Elderly people not falling in any of the above categories, need to make their own arrangements for social care


The UK population faces a demographic challenge

The number of older people, as a proportion of the total population is rising overtime in the country, just like in many other Western nations, and is a cause for concern as far as funding for their social care is concerned.

In the year 1991, close to 16 per cent of total British population fell in the age-group of 65 and above. It steadily rose over time to 18 per cent in 2030 and forecasted to increase to 22 per cent by the year 2030.

These numbers translate into a higher need to focus on social care reforms in times to come, as its demand would be rising. If spending is constrained, the increasing need will remain unmet.


Suggestions by Policy Exchange

A leading thinktank in the UK, Policy Exchange had recommended in its recent report (published on 22 April 2020) for introducing new taxes to fund social care needs, while retaining it as a free service for the end-user elderly population. It said such a tax basket will be able to serve all the older people who suffer from a chronic-illnesses that may need expensive care, in the long-term.

The care should incorporate including the patient’s priorities and need for autonomy in mind. NHS should use the latest technology tools like artificial intelligence and robotics, so that the delivery of social care may be enhances, opines the thinktank.

A marginal rise in taxation should be able to meet the needs of the social care for the elderly, added Policy Exchange. Then, the only thing required would be to allocate higher amount of funds towards social care in forthcoming budgets.

The industry’s point of view

The British industry associations have been sensitive to the topic. They have suggested implementing Care Isa and Care pension schemes by the British government. It simply means that the individuals start to make their own contributions to fund for their social care, rather than the government bearing the brunt of it.

Finally, reforming the social care system in the UK has been a long running agenda of the government. The PM is again under pressure to bring out the roadmap for the same, which he had announced to do way back in June 2019.  UK Health Secretary has asked his team to prepare a strategy that might involve putting an additional levy on population aged 40+ to cover the cost of social care in the country. With a renewed focus, the new health and social care taskforce is reviewing suggestions and may soon come out with a tangible plan to improve care for the elderly across the country. Probably this system overhaul will bring a sigh of relief to the aged, during the testing and uncertain Covid-19 times.


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