Manchester Mayor Andy Burnham is pushing for an NHS-style National Care Service to overhaul social care.. To finance this, a proposal suggests a voluntary 1p income tax for citizens aged 40 and above.
The auto-enrolment model for social care funding
Sir Steve Webb, a former pensions minister, suggests using the "hugely successful" auto-enrolment model to drive participation in a new social care fund. As reported in a policy paper by pensions experts at LCP, the scheme would automatically charge a 1p levy to individuals over 40, allowing them to opt out if they choose. This mechanism is designed to mirror the pension auto-enrolment system, which has significantly increased the number of people contributing to retirement savings.
By utilizing this opt-out structure, proponents argue that the National Care Service could secure a stable, predictable stream of revenue. The goal is to move social care away from ad-hoc funding and toward a structured, contributory system that provides long-term security for the aging population.
A £3 billion annual target via a capped 1p levy
The proposed levy aims to generate more than £3 billion in immediate annual revenue, even if a significant portion of the population opts out. According to the LCP report, the 1p charge would apply to the basic rate earnings of taxpayers earning between £12,570 and £50,270. this effectively caps the annual cost for most contributors at just under £380 per year.
In exchange for these payments, contributors would receive a 4% discount on their social care costs for every year they have participated in the scheme. For those who maintain consistent contributions for 25 years, the plan suggests that their social care costs could eventually be funded entirely for free. This creates a direct, tangible incentive for middle-aged taxpayers to participate in the levy.
The £50 billion tension over the pension triple lock
Andy Burnham’s vision for an NHS-style National Care Service may rely heavily on significant changes to existing pension structures.. The proposal suggests that the service could be partially funded by scrapping the pension triple lock. The Department for Work and Pensions (DWP) has estimated that ending the triple lock by 2030 could result in savings of £15 billion per year by 2040, a figure that could climb to £50 billion by 2050.
However, the DWP's projections suggest a complicated transition. The report notes that these savings might be minimal in the early part of the next decade and could potentially yield nothing at all in the short term. This creates a potential funding gap between the immediate needs of a new National Care Service and the long-term savings promised by pension reform.
Missing details in Andy Burnham's service roadmap
While the financial mechanics of the 1p levy have been outlined by Sir Steve Webb, several critical components of the National Care Service remain unaddressed. The source notes that Andy Burnham has yet to clarify the exact timeline for the service's launch or provide a comprehensive breakdown of its total funding requirements.
Furthermore, the proposal leaves several questions regarding the political feasibility of the plan. It remains unclear how the government would manage the backlash from pensioners if the triple lock is removed, or how the "voluntary" nature of the levy would be handled for higher earners who fall outside the basic rate cap. Without a detailed roadmap from the Manchester Mayor, the plan remains a theoretical framework rather than a concrete policy.
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