Elderly Britons must ‘dip into their property wealth to meet care costs’ 

Pensioners could be told to dip into their housing wealth to meet social care bills.

Jeremy Hunt is expected to say property should not be off limits when announcing long-awaited reforms next month.

The Health Secretary will also suggest the idea of compulsory insurance to protect against crippling old age care costs.

Government sources said it was right that those with substantial assets should pay more.

The move raises the spectre of the ‘dementia tax’ that wrecked Conservative election hopes last year. However there would now be a cap on contributions, allowing parents to pass on some of their wealth.

Damian Green, who was in charge of social care until he resigned from the Cabinet in December, said older people should give up a ‘small proportion of the wealth tied up in their houses’. The alternative, he said, was higher taxes for workers, which would risk intergenerational unfairness.

The Health Secretary is set to  suggest the idea of compulsory insurance to protect against crippling old age care costs. Pictured a stock photo of a pensioner looking at her pension book

Mr Hunt, whose brief covers social care, is expected to publish a green paper just before Parliament breaks up for the summer recess. Its aim is to reform a system under which people are liable for the full cost of their care until their savings – including housing wealth – are down to just £23,500.

Mr Green said: ‘It’s a very difficult nettle to grasp but if we all don’t want to face the prospect of second-rate social care in old age then more money has to be found. For working people this may come from taxes but for those beyond working age the most likely source is a small proportion of the wealth tied up in their houses.’

Caroline Abrahams, of the charity Age UK, said that if the value of an older person’s home were used as a means test for care at home, some would choose to live without it and therefore put themselves at risk.