Government weighs charge for elderly care

By Ben Hirschler

LONDON (Reuters) - The government may introduce a compulsory charge of up to 20,000 pounds per person payable on retirement to cover the cost of care in old age, health minister Andy Burnham said on Tuesday.

The proposal, which would see everyone who can afford it paying between 17,000 and 20,000 pounds, is one of the three options being considered alongside a top-up payment system and an insurance-based approach.

"We are proposing a radical reform of care ... we need a system that's fair, simple and affordable for everyone," Burnham said.

Under the current system, some people have to pay tens of thousands of pounds, or sell their house, to pay for care in old age, since those with homes or savings worth more than 23,500 pounds must pay for their own care.

On average, Britons spend 30,000 pounds for care but 20 percent pay more than 50,000 pounds and those who develop serious conditions like Alzheimer's can pay more than 200,000 pounds.

Caring for the country's ageing population is a big and growing business for operators of care homes, such as Southern Cross, Care UK, Nestor, Claimar Care and Mears Group.

Experts say the current system is a lottery and not sustainable in the long-term.

"With the ageing population and a diminishing workforce to support the elderly there's going to be a significant shortfall," said Gris Glasper, an industry analyst at stockbroker Brewin Dolphin.