Politics · United Kingdom · 4 hrs ago
Proposal would use an opt-out 1p levy to help fund social care
Former pensions minister Steve Webb has proposed a new way to raise money for social care in the UK.
The plan would automatically charge people over 40 who pay income tax an extra 1p, unless they opt out.
It would apply only to basic-rate earnings between £12,570 and £50,270, making the maximum charge just under £380 a year.
In return, contributors would get a 4 per cent discount on care costs for each year they paid in, with care costs covered after 25 years of contributions.
Webb says the levy could raise more than £3 billion a year, even if many people opt out.
The proposal is intended to help address urgent care needs while plans for an NHS-style National Care Service are developed.
Andy Burnham has not yet set out how that service would be funded or when it would begin.
A proposal would automatically enroll over-40s who pay income tax in a voluntary 1p levy to help fund social care, unless they opt out.
Former pensions minister Sir Steve Webb says the levy could raise more than £3 billion a year immediately, even if significant numbers opt out.
Contributors would receive a 4 per cent discount on care costs for each year they paid in, with 25 years of contributions covering costs in full.
The levy would apply only to basic-rate earnings between £12,570 and £50,270, capping the annual charge at just under £380.
The proposal is intended to provide funding ahead of a planned National Care Service, whose funding and start date Andy Burnham has not yet specified.
- Who
- Sir Steve Webb proposed the levy. It would apply to over-40s who pay income tax.
- What
- An opt-out 1p levy would help fund social care, with discounts on care costs for contributors.
- When
- The proposal was reported on 11 October 2026. The start date for the levy is not stated.
- Where
- Not stated
- Why
- To raise money for social care and ease some urgent problems ahead of a planned National Care Service.
This story does not have two clearly opposing sides.
This scheme, with an opt out for those who don't want it, provides an affordable and efficient way for people to protect their savings.
We have already had a very warm response to these ideas as we have discussed them, and hope that they might form a useful approach for consideration as part of all-party discussions.
This story does not have a timeline yet.
- Levy rate
- 1p
- Potential annual revenue
- More than £3 billion immediately
- Eligible earnings
- Basic-rate earnings between £12,570 and £50,270
- Annual cap
- Just under £380
- Care-cost discount
- 4 per cent for each year paid in
- Full care-cost coverage
- After 25 years of contributions
Sources
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