New tax on over-40’s being considered to fund social care

A new tax being considered by ministers as a way to fund social care could raise up to £15bn a year, according to a new report. The proposal would see a 2.5 per cent levy applied to the earnings of people over the age of 40, similar to the model used in Germany. The revenue generated by the new tax would go into a ring-fenced pot used to fund social care. Research carried out by pensions and risk consultancy Hymans Robertson suggested the German-style system could raise half of the money needed to plug the £30bn-a-year gap in social care funding the UK is facing by 2031.