Thousands more people will pay inheritance tax to fund a watered-down version of the Dilnot plan for universal state funding for elderly and social care, the government is expected to announce on Monday.
Pensioners and disabled adults will have to pay up to £75,000 of any care bills they incur before the state steps in under the new arrangement. There will also be an increase in the means-test threshold, so that anyone with assets under £123,000 will automatically receive free care. Currently, if someone needs residential care and has more than £23,250 in savings, capital or assets, they must pay for their care in full. Controversially, however, the coalition is paying for the change by maintaining a freeze on the inheritance tax threshold for another three years.