Warning over £106bn bill for old-age care

Caring for Britain’s growing elderly population could cost up to £106bn a year, equivalent to paying for a second NHS, according to research from the Policy Exchange thinktank.

In its latest report, released today, the influential rightwing group says that introducing free personal care for the elderly through taxation, as happened in Scotland in 2002, would see friends and family withdraw their informal care.

The cost to the state of providing this support, combined with the growing ageing population, would land the NHS with unsustainable costs.

Instead, the report says, the public should pay a substantial proportion of their long-term care costs through insurance or annuity-backed products.

Henry Featherstone, author of the report and head of Policy Exchange’s health and social care unit, said: “As state-funded, long-term care services have tightened, the burden has resulted in a rise in NHS spending on elderly care.”

The report says that there was a 67% increase in NHS spending on long-term care between 2007-08 and 2008-09.

Last year, the NHS spent about 4% (£4.23bn) of its annual budget on elderly social care. Local authorities paid £7.21bn a year.

The report warns that about 1.5 million over-65s will need support by 2025. It could mean state spending on elderly care rising by 50% over the next 15 years, from £16.17bn to £24.26bn at 2008-09 prices.