Older workers face paying Jeremy Hunt’s 'care tax' to cover shortfall in funding

The new plans will affect more than 1.3 million people and will raise more than £2bn

Britain's Health and Social Care Secretary Jeremy Hunt leaves 10 Downing Street (Getty)

Those working beyond the state pension age will have to start paying a new “care tax”, under plans being considered by the government.

Currently those who reach state pension age stop paying national insurance but the proposals, tabled by Jeremy Hunt, will levy a 12 per cent charge on nearly 1.3 million workers.

The new tax will raise about £2bn and is intended to help with the shortfall in funding.

The plans will be published next month as part of a green paper on care and support for the elderly and will also be backed in a report by the Intergenerational Commission which will be published on 8 May, according to The Times.

“If you have a 67-year-old working alongside a 57-year-old doing the same job for the same pay do we really say that the 67-year-old should take home more and have lower deductions?” Lord Willetts, the commission’s chairman, said.

The number of people working past the state pension age has increased year on year and the current figure stands at approximately 1.3 million.

The Intergenerational Commission will be warning against placing the burden of paying for social care on younger workers.

“The older millennials are now hitting their late thirties, still earning less than those born five and even 10 years earlier,” Lord Willets added.

“Pensioners are less likely to be poor than families of working age so it is only reasonable that when you look at healthcare provision that you look at a fair contribution from older people.”