{"id":123689,"date":"2026-07-30T13:45:00","date_gmt":"2026-07-30T12:45:00","guid":{"rendered":"https:\/\/en.econostrum.info\/uk\/?p=123689"},"modified":"2026-07-30T12:13:08","modified_gmt":"2026-07-30T11:13:08","slug":"social-care-funding-shake-up","status":"publish","type":"post","link":"https:\/\/en.econostrum.info\/uk\/social-care-funding-shake-up\/","title":{"rendered":"Social Care Funding Shake-Up: How Burnham\u2019s Plans Could Affect Your Money"},"content":{"rendered":"\n<p>Andy Burnham is considering two possible funding models for a <strong>new social care system,<\/strong> with proposals that could affect <strong>workers\u2019 incomes<\/strong> or the way <strong>estates are taxed<\/strong>. No final decision has been made, but both options are being examined as part of a wider review of social care funding.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Two Funding Options Under Review for National Care Service<\/h2>\n\n\n\n<p>The Prime Minister has ordered an accelerated review into the future of social care, led by <strong>Casey<\/strong>, before deciding how reforms should be financed. Government sources indicate that two possible approaches are being discussed.<\/p>\n\n\n\n<p>The first option involves a <strong>1.8% social insurance<\/strong> levy on income, based on proposals developed by <a href=\"https:\/\/re-state.co.uk\/\" target=\"_blank\" rel=\"noopener\">Re:State<\/a>, a think tank linked to Burnham. The second option would replace the current inheritance tax system with a <strong>10% charge on estates<\/strong>, designed to help finance a proposed <strong>National Care Service<\/strong>.<\/p>\n\n\n\n<p>Both ideas would represent major changes to how social care costs are funded in the UK.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-x wp-block-embed-x\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Andy Burnham on social care:<br><br>There&#39;s a possibility of looking at different ways of paying for social care. What I know is the current way is the most unfair way. <br><br>It&#39;s like American healthcare. So the most unfortunate people end up with the biggest bill.<br><br>Source: This Morning <a href=\"https:\/\/t.co\/jW50BttwXx\">pic.twitter.com\/jW50BttwXx<\/a><\/p>&mdash; Clash Report (@clashreport) <a href=\"https:\/\/x.com\/clashreport\/status\/2082764649234075718?ref_src=twsrc%5Etfw\">July 30, 2026<\/a><\/blockquote><script async src=\"https:\/\/platform.x.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">Income Levy Could Add Costs for Workers<\/h2>\n\n\n\n<p>Under the proposed social insurance model, workers aged over <strong>34<\/strong> would contribute <strong>1.8%<\/strong> of income above <strong>\u00a36,240<\/strong>. The threshold would sit below the current <strong>\u00a312,570 Personal Allowance<\/strong>, meaning many workers would pay the levy on a larger share of their earnings.<\/p>\n\n\n\n<p>For someone earning the average full-time salary of <strong>\u00a339,039<\/strong>, the additional annual cost would be around <strong>\u00a3590<\/strong>, equal to about <strong>\u00a349 per month<\/strong>. This would come alongside existing deductions such as income tax, National Insurance contributions and workplace pension payments.<\/p>\n\n\n\n<p>The money raised would be used to fund care services for future generations, with additional contributions expected from wealthier pensioners.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Estate Tax Proposal Would Replace Inheritance Tax<\/h2>\n\n\n\n<p>The alternative proposal would remove the current inheritance tax system and introduce a flat <strong>10% charge on all estates<\/strong>. At present, inheritance tax applies only to a small proportion of estates because of tax-free allowances.<\/p>\n\n\n\n<p>Individuals can currently pass on up to<strong> \u00a3325,000<\/strong> without <a href=\"https:\/\/en.econostrum.info\/uk\/why-the-new-inheritance-tax-rules\/\" target=\"_blank\" rel=\"noopener\">inheritance tax<\/a>, with an additional <strong>\u00a3175,000<\/strong> allowance available when a main residence is passed to children or grandchildren. For couples, the combined allowances can reach up to <strong>\u00a31 million<\/strong> in certain circumstances.<\/p>\n\n\n\n<p>Under a flat estate levy, those protections would disappear. An inheritance of <strong>\u00a350,000<\/strong> would result in a possible <strong>\u00a35,000 charge<\/strong>, while an inheritance of <strong>\u00a3100,000<\/strong> could lead to a<strong> \u00a310,000<\/strong> payment. An estate worth <strong>\u00a3500,000<\/strong> could face a <strong>\u00a350,000<\/strong> charge.<\/p>\n\n\n\n<figure class=\"wp-block-image alignnone wp-image-123692 size-full\"><img decoding=\"async\" width=\"1344\" height=\"1200\" src=\"https:\/\/en.econostrum.info\/uk\/wp-content\/uploads\/sites\/6\/2026\/07\/econo-uk-us-visual-selection-2026-07-30T114531.900.png\" alt=\"Social Care Funding\" class=\"wp-image-123692\" srcset=\"https:\/\/en.econostrum.info\/uk\/wp-content\/uploads\/sites\/6\/2026\/07\/econo-uk-us-visual-selection-2026-07-30T114531.900.png 1344w, https:\/\/en.econostrum.info\/uk\/wp-content\/uploads\/sites\/6\/2026\/07\/econo-uk-us-visual-selection-2026-07-30T114531.900-380x339.png 380w, https:\/\/en.econostrum.info\/uk\/wp-content\/uploads\/sites\/6\/2026\/07\/econo-uk-us-visual-selection-2026-07-30T114531.900-896x800.png 896w, https:\/\/en.econostrum.info\/uk\/wp-content\/uploads\/sites\/6\/2026\/07\/econo-uk-us-visual-selection-2026-07-30T114531.900-520x464.png 520w\" sizes=\"(max-width: 1344px) 100vw, 1344px\" \/><figcaption class=\"wp-element-caption\">Credit : Econostrum<\/figcaption><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">&nbsp;<\/h2>\n\n\n\n<h2 class=\"wp-block-heading\">Proposal Revives Earlier Debate Over Inheritance Tax<\/h2>\n\n\n\n<p>The estate levy idea is not new. Burnham previously suggested replacing inheritance tax with a flat charge in 2010 during his time as health secretary. A similar debate took place under former Prime Minister Theresa May in 2017, when plans linked to social care funding became known as the \u201c<em>dementia tax<\/em>\u201d controversy.<\/p>\n\n\n\n<p>Critics argued that changes to inheritance rules could create uncertainty for families planning their finances.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Final Decision Depends on Social Care Review<\/h2>\n\n\n\n<p>The Government has stressed that no final decision has been taken and that funding choices will depend on the outcome of the social care review. The proposals highlight the growing pressure on policymakers to find long-term funding solutions for a sector facing rising demand from an ageing population.<\/p>\n\n\n\n<p>Any reform would require balancing the need for sustainable care funding with concerns about the effect on household finances and intergenerational wealth.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The UK Government is examining major changes to how social care is funded. Two proposals under review could affect millions of households through changes to income contributions or inheritance rules, with the final decision expected after an upcoming review.<\/p>\n","protected":false},"author":6,"featured_media":123693,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[44],"tags":[],"class_list":["post-123689","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33","no-featured-image-padding"],"_links":{"self":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/123689","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/comments?post=123689"}],"version-history":[{"count":4,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/123689\/revisions"}],"predecessor-version":[{"id":123712,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/posts\/123689\/revisions\/123712"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/media\/123693"}],"wp:attachment":[{"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/media?parent=123689"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/categories?post=123689"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/en.econostrum.info\/uk\/wp-json\/wp\/v2\/tags?post=123689"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}