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Wiley InterScience | |||||||
  Fiscal StudiesVolume 24 Issue 4, Pages 387 - 426 Published Online: 2 Feb 2005 © Institute for Fiscal Studies, 2009 Published on behalf of the Institute for Fiscal Studies
Abstract | References | Full Text: PDF (Size: 163K) | Related Articles | Citation Tracking  Who Will Pay for Long-Term Care in the UK? Projections Linking Macro- and Micro-Simulation Models This paper arises from research financed by the Institute for Public Policy Research and uses models developed with the financial support of the Department of Health (PSSRU model) and the Nuffield Foundation (NCCSU model). Material from the Family Resources Survey and the General Household Survey is crown copyright, made available by the Office for National Statistics via the UK Data Archive and used with permission. All responsibility for the analysis and views expressed in this paper rests with the authors. Copyright Institute for Fiscal Studies, 2003 KEYWORDS H51 • H53 • I38 • J18 • J14 • long-term care • older people • elderly • state provision Abstract
The long-term care funding system continues to attract much debate in the UK. We produce projections of state and private long-term care expenditure and analyse the distributional impact of state-financed care, through innovative linking of macro- and micro-simulation models. Variant assumptions about life expectancy, dependency and care costs are examined and the impact of universal state-financed ('free') personal care, based on need but not ability to pay, is investigated. We find that future long-term care expenditure is subject to considerable uncertainty and is particularly sensitive to assumed future trends in real input costs. On a central set of assumptions, free personal care would, by 2051, increase public spending on long-term care from 1.1 per cent of GDP to 1.3 per cent, or more if it generated an increase in demand. Among the care-home population aged 85 or over, the immediate beneficiaries of free personal care would be those with relatively high incomes. | 
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