Dr Wesley Key is a Senior Lecturer in Social Policy at the University of Lincoln & was a Welfare Rights Home Visiting Officer for an older people’s charity for 17 years
With reform of the social care system in England a high priority for Andy Burnham, public appetite for further tax rises is likely to be limited, given that the government has already raised more than £70bn worth of taxes over the last two years. Couple this with growing debt interest and a commitment to the Triple Lock, and it’s not obvious where a cash injection for social care can be found.
The public services think tank Re:State suggests imposing a levy of 1.8 per cent on earnings above the workplace pensions auto-enrolment threshold for all workers aged 34 and over. This would not promote intergenerational fairness. Instead, the post-war generation would receive more generous social care than those before them, and Generations X, Y and Z would be left to foot the bill, with no guarantee of ‘good’ social care provision in their own old age.
A better approach would be to look at the “re-prioritisation” of government funds, and find new money for social care from savings within existing spending areas. Echoing the call from David Willetts in October 2015, there needs to be a rebalancing of our welfare state in a manner that reduces the growing share of welfare spending that goes towards the oldest age groups. With occupational pension incomes rising significantly since the 1980s, areas of the pensioners’ welfare budget where savings can be found to raise extra funds for social care potentially include the following:
The State Pension Triple Lock. The OBR admits that the Triple Lock has cost much more than its initial expectations. The non-earnings elements of the lock were triggered in 8 of its first 13 years, and the OBR estimates that uprating the state pension by the Triple Lock – rather than with earnings – will add £15.5 billion to state pension spending annually by 2029-30. The OBR also suggests that state pension spending will rise from 5 per cent of GDP in 2024-25 to roughly 7.7 per cent of GDP in 2073-74. This compares with 6.1 per cent of GDP if we returned to uprating the state pension in line with earnings, with this increase in state pension spending as a share of GDP only partially offset by increases to the state pension age.
The Winter Fuel Allowance. A 2026 House of Commons Library briefing suggests that paying the Allowance to every person of qualifying age with annual income under £35,000 will have cost an extra £1.3-£1.4 billion per year compared to the 2024-25 policy of paying the Allowance to only those on Pension Credit. Moreover, between 2011 and 2024, the Allowance cost roughly £2 billion per year. Restricting it to means-tested benefit recipients, or removing it entirely, could raise significant sums to instead fund social care.
Free Prescriptions for People aged 60-65. The cost per year of universal free prescriptions for older people has risen significantly. The 2021 impact assessment on the notion of charging 60-65-year-olds for prescriptions on the same means-tested basis as younger adults suggested that the NHS would raise on average £226m per year from extra prescription charges over ten years – money that could instead go into improving social care.
Concessionary Bus Travel for Pensioners. According to the government’s Concessionary Travel Statistics, based on data from Travel Concession Authorities, in the year ending March 2024, net current expenditure on concessionary bus travel in England was £885 million. Most of this spending will have been on people over the state pension age, money that could be directed towards better social care for older people unable to use a bus.
The annual £10 Christmas Bonus. This goes largely to pensioners, as well as to people getting carer’s allowance, pension credit and certain disability benefits. It costs around £186m a year, and so removing it solely from people over the state pension age would therefore likely save over £100 million a year to reinvest in social care.
Attendance Allowance (AA). This non-means-tested disability benefit can be claimed after people reach state pension age, and costs £7.74 billion. Although the DWP does not divide claimant statistics into people receiving the high and low rates of AA, removing entitlement to new claims at the lower rate – whilst maintaining the higher rate payments to those with greater care needs – could save millions of pounds per year. These savings could be targeted towards a more generous, simpler social care system, rather than people having to apply for AA and then use it to pay for care.
The 25p per week state pension uplift paid to people aged 80-plus. This ‘legacy’ benefit will not be paid to people on the ‘new’ state pension. However, it will cost a significant sum for several more years – in May 2012, there were 3.2 million pensioners aged 80 and over, putting the annual cost of the 25p age addition at £41 million in 2013. We now have many more people aged 80-plus, and so removing this uplift could potentially save over £41 million a year for the next few years. However, this would drop from 2031 when new individuals in their 80s would no longer receive the uplift.
The above measures could collectively save several billion pounds per year, which could help to fund a better social care system, reducing (or removing) the need for tax rises and/or spending cuts elsewhere. Increasing the state pension in line with prices would return us to Thatcher’s policy of the 1980s, when the U.K. population was younger than now, and it is the kind of hard choice that politicians of all major parties have consistently ducked since the Thatcher years.
Ultimately, the scale of funds needed to improve social care depends on the findings of the Casey Commission and the government’s subsequent response. Andy Burnham has spoken about a national care service for England run on the “NHS principle,” and it has been estimated that a free-at-the-point-of-use care system could cost £18.5 billion a year by 2035-36. This, the most expensive option for social care reform, could transform one of the world’s cruellest care systems into one of the most generous.
A cheaper alternative is the Scottish system, where free personal care is provided by the state for adults at home or in residential care. The state pays for hygiene, meals, medication and general wellbeing, but support with housework, laundry, shopping and the cost of attending day care centres is means-tested.
A July 2026 Health Foundation think tank report suggested that free personal care for over-65s in England would cost an extra £7.5bn by 2035-36, and this realistic approach could improve existing provision and be funded simply by changing the State Pension Triple Lock to a less generous uprating mechanism.
But if the country wants universal social care provision, the money should come from restricting other welfare spending which benefits its increasingly affluent older population, rather than from punishing working people with ever more tax rises or benefit cuts.
Dr Wesley Key is a Senior Lecturer in Social Policy at the University of Lincoln & was a Welfare Rights Home Visiting Officer for an older people’s charity for 17 years
With reform of the social care system in England a high priority for Andy Burnham, public appetite for further tax rises is likely to be limited, given that the government has already raised more than £70bn worth of taxes over the last two years. Couple this with growing debt interest and a commitment to the Triple Lock, and it’s not obvious where a cash injection for social care can be found.
The public services think tank Re:State suggests imposing a levy of 1.8 per cent on earnings above the workplace pensions auto-enrolment threshold for all workers aged 34 and over. This would not promote intergenerational fairness. Instead, the post-war generation would receive more generous social care than those before them, and Generations X, Y and Z would be left to foot the bill, with no guarantee of ‘good’ social care provision in their own old age.
A better approach would be to look at the “re-prioritisation” of government funds, and find new money for social care from savings within existing spending areas. Echoing the call from David Willetts in October 2015, there needs to be a rebalancing of our welfare state in a manner that reduces the growing share of welfare spending that goes towards the oldest age groups. With occupational pension incomes rising significantly since the 1980s, areas of the pensioners’ welfare budget where savings can be found to raise extra funds for social care potentially include the following:
The State Pension Triple Lock. The OBR admits that the Triple Lock has cost much more than its initial expectations. The non-earnings elements of the lock were triggered in 8 of its first 13 years, and the OBR estimates that uprating the state pension by the Triple Lock – rather than with earnings – will add £15.5 billion to state pension spending annually by 2029-30. The OBR also suggests that state pension spending will rise from 5 per cent of GDP in 2024-25 to roughly 7.7 per cent of GDP in 2073-74. This compares with 6.1 per cent of GDP if we returned to uprating the state pension in line with earnings, with this increase in state pension spending as a share of GDP only partially offset by increases to the state pension age.
The Winter Fuel Allowance. A 2026 House of Commons Library briefing suggests that paying the Allowance to every person of qualifying age with annual income under £35,000 will have cost an extra £1.3-£1.4 billion per year compared to the 2024-25 policy of paying the Allowance to only those on Pension Credit. Moreover, between 2011 and 2024, the Allowance cost roughly £2 billion per year. Restricting it to means-tested benefit recipients, or removing it entirely, could raise significant sums to instead fund social care.
Free Prescriptions for People aged 60-65. The cost per year of universal free prescriptions for older people has risen significantly. The 2021 impact assessment on the notion of charging 60-65-year-olds for prescriptions on the same means-tested basis as younger adults suggested that the NHS would raise on average £226m per year from extra prescription charges over ten years – money that could instead go into improving social care.
Concessionary Bus Travel for Pensioners. According to the government’s Concessionary Travel Statistics, based on data from Travel Concession Authorities, in the year ending March 2024, net current expenditure on concessionary bus travel in England was £885 million. Most of this spending will have been on people over the state pension age, money that could be directed towards better social care for older people unable to use a bus.
The annual £10 Christmas Bonus. This goes largely to pensioners, as well as to people getting carer’s allowance, pension credit and certain disability benefits. It costs around £186m a year, and so removing it solely from people over the state pension age would therefore likely save over £100 million a year to reinvest in social care.
Attendance Allowance (AA). This non-means-tested disability benefit can be claimed after people reach state pension age, and costs £7.74 billion. Although the DWP does not divide claimant statistics into people receiving the high and low rates of AA, removing entitlement to new claims at the lower rate – whilst maintaining the higher rate payments to those with greater care needs – could save millions of pounds per year. These savings could be targeted towards a more generous, simpler social care system, rather than people having to apply for AA and then use it to pay for care.
The 25p per week state pension uplift paid to people aged 80-plus. This ‘legacy’ benefit will not be paid to people on the ‘new’ state pension. However, it will cost a significant sum for several more years – in May 2012, there were 3.2 million pensioners aged 80 and over, putting the annual cost of the 25p age addition at £41 million in 2013. We now have many more people aged 80-plus, and so removing this uplift could potentially save over £41 million a year for the next few years. However, this would drop from 2031 when new individuals in their 80s would no longer receive the uplift.
The above measures could collectively save several billion pounds per year, which could help to fund a better social care system, reducing (or removing) the need for tax rises and/or spending cuts elsewhere. Increasing the state pension in line with prices would return us to Thatcher’s policy of the 1980s, when the U.K. population was younger than now, and it is the kind of hard choice that politicians of all major parties have consistently ducked since the Thatcher years.
Ultimately, the scale of funds needed to improve social care depends on the findings of the Casey Commission and the government’s subsequent response. Andy Burnham has spoken about a national care service for England run on the “NHS principle,” and it has been estimated that a free-at-the-point-of-use care system could cost £18.5 billion a year by 2035-36. This, the most expensive option for social care reform, could transform one of the world’s cruellest care systems into one of the most generous.
A cheaper alternative is the Scottish system, where free personal care is provided by the state for adults at home or in residential care. The state pays for hygiene, meals, medication and general wellbeing, but support with housework, laundry, shopping and the cost of attending day care centres is means-tested.
A July 2026 Health Foundation think tank report suggested that free personal care for over-65s in England would cost an extra £7.5bn by 2035-36, and this realistic approach could improve existing provision and be funded simply by changing the State Pension Triple Lock to a less generous uprating mechanism.
But if the country wants universal social care provision, the money should come from restricting other welfare spending which benefits its increasingly affluent older population, rather than from punishing working people with ever more tax rises or benefit cuts.