Matt Hancock pledges to end scandal of pensioners being forced to sell their ...

Matt Hancock today vows to end the scandal of pensioners being forced to sell their home to pay for old-age care.

Launching one of the first major policy initiatives of the Tory leadership campaign, the Health Secretary calls for a state-backed insurance scheme.

This would cover potentially ruinous care costs and remove the risk of being unable to pass on the family home.

In an interview with the Daily Mail, Mr Hancock said the social care system was unsustainable and unfair.

The idea for an insurance scheme is the centre-piece of the Government’s long-delayed ‘green paper’ on social care, which has been held up for a year by wrangling between Downing Street and the Treasury over costs.

Mr Hancock, who formally launches his bid to succeed Theresa May as prime minister this morning, has adopted it as a ‘priority’ for his own campaign.

A relative outsider in the leadership race, he is expected to retain a top Cabinet job, possibly as chancellor.

Today he also pledges a £3.5billion cash injection to help stave off collapse in the social care system.

‘The sign of a civilised society is how we treat the most vulnerable and our social care system is not up to scratch,’ he says. ‘The system is unsustainable.

‘People are getting older – that is a good thing – but there isn’t enough funding in the system. And there’s a whole number of injustices. 

One of the biggest injustices is that for people who worked hard all their lives and have put money aside – the system penalises them and won’t fund their care without them having to sell the house, whereas people who haven’t put money aside get their care supported. I think this is very unfair.’

Previous attempts to persuade the insurance market to offer cover for social care costs have failed because of the potential size and unpredictability of the bills involved. 

While a quarter of people will die before incurring any care costs, another 10 per cent will rack up costs of more than £100,000 and, in some cases, many times that.

Mr Hancock describes the situation as ‘the greatest financial lottery we face’ and said there was a clear ‘role for government’ in providing insurance that the market will not offer. Costs are to be determined by a detailed consultation, but premiums would not be cheap.

Mr Hancock says workers would have to fund a scheme able to cover average lifetime care costs of about £40,000 –more if they wanted to also cover potential residential costs.

He stresses that the payments could be made over many years of a working life.

Last year he said he was ‘attracted’ to a scheme that would require all workers over 40 to contribute 2.5 per cent of their wages. The idea is based on the German model. There, an adult on a £27,000 salary pays about £675 a year, while those earning £50,000 pay up to £1,250.

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