Type of Publication: Article in Journal

The Role of Private Finance in Paying for Long Term Care

Author(s):

Les Mayhew, Martin Karlsson; Rickayzen, Ben

Title of Journal:

The Economic Journal

Volume (Publication Date):

120 (2010)

Number of Issue:

548

pages:

478-504

Digital Object Identifier (DOI):

doi:10.1111/j.1468-0297.2010.02388.x

Citation:

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Abstract

An ageing population and increased longevity means that long term care will become progressively more expensive. In 2009 the Government published a Green Paper on future funding options and a White Paper in 2010. This article considers the role of private finance products under the ‘Partnership’ option. It finds that few households are able to pay for LTC based on income and savings but the number increases if housing assets are included. We show that products can be devised for a range of circumstances, although state support would need to continue. We propose a simplified means testing system based on a combination of income and assets.