Sir Andrew Dilnot, whose landmark review has shaped Britain’s social care funding debate for over a decade, warns families face a potentially catastrophic financial risk
Families face a frightening “lottery” over what it will cost to look after them in later life – and in the most extreme cases the bill for a couple could run to £2million. That warning comes from Sir Andrew Dilnot, whose landmark review has shaped the debate on how Britain should pay for social care for more than a decade, speaking with the Institute for Fiscal Studies (IFS).
He says most people will need relatively little help, but a small minority could be hit with huge costs after years of support. In one stark scenario, he said a couple could each spend around a decade in residential care, pushing the combined price tag towards £2million – not a typical bill, but a reminder of the potentially catastrophic risk facing families who cannot predict how much care they will eventually need.
The insurance problem at the heart of social care
Sir Andrew summed up the imbalance in a single line: “Most people are not going to need much. A small number are going to need a lot,” he said. That, he argued, makes social care fundamentally an insurance issue – because it’s the uncertainty, not the average cost, that can devastate a household’s finances.
The former chair of the Commission on the Funding of Care and Support was speaking as Andy Burnham pushes for a National Care Service and a new review of social care gets under way. But Sir Andrew said politicians do not need yet another review simply to work out what needs to change – the hard part is funding and delivery. His message to Mr Burnham was blunt: ‘Just do it.’
Why saving your way out isn’t realistic
To explain the scale of the problem, Sir Andrew asked people to imagine a group of 65-year-olds whose future care needs were known in advance. Around 20% would never need social care at all, while others might need only days or weeks of help.
Somewhere in the middle, a person might need several months in a residential home, or perhaps six months of care at home – costing around £20,000 to £40,000. But at the extreme end, costs can surge dramatically, he warned, including the example where a couple each needing around 10 years of residential care could face a bill of up to £2million.
“Most people couldn’t possibly save £2million,” he said. He also pointed out the obvious catch: even if someone could put that amount aside, most would never need anything like it.
Why the state may be the only “insurer”
Sir Andrew compared care costs to other big risks people routinely protect themselves against. Homes can be insured against fire; cars can be insured against accidents. But there is no equivalent private market that can realistically cover a cost that may arrive decades in the future and could run into the hundreds of thousands — or more.
That is why, he said: “In the end, I think the only entity that can provide this type of insurance is the state.”
His argument is that government should pool at least the catastrophic risk, rather than leaving individuals forced to gamble their savings on whether they will be among the unlucky minority who need years of expensive support.
The £23,250 “cliff edge” in the current system
Under existing rules, council support is means-tested, taking account of both someone’s care needs and their finances. That means people with savings and assets can be expected to contribute – but Sir Andrew highlighted what he called a particularly stark threshold.
The current upper capital limit is £23,250. Below that, someone may get substantial support; just above it, families can find themselves in a very different position financially.
His commission recommended raising the threshold to around £100,000 back in 2011 – which he said would now be roughly £170,000 to £200,000. The goal would be a gentler taper, rather than a sudden drop-off in help.
Dilnot’s cap on what people pay
The most widely-known recommendation from the 2011 commission was a lifetime cap on eligible care costs. The idea was that an individual would pay the first £35,000, and the state would cover costs beyond that.
Sir Andrew said the equivalent today would be around £75,000 to £80,000. He stressed that the state would not necessarily need to pay every pound of care – but it should protect people from the catastrophic end of the risk by limiting what individuals can be expected to pay.
Councils squeezed – and services feel it
David Phillips, associate director at the IFS, said councils are under mounting financial pressure too. Social care spending this year is forecast to be around 25% to 30% higher in real terms than in 2019-20, based on figures discussed in the IFS podcast.
He said spending has risen by around 4% above inflation on average in recent years. As a result, social care is taking a larger share of council budgets – putting pressure on other services including libraries, leisure centres, refuse collection and road cleaning.
Councils are also grappling with rising costs in children’s social care, homelessness and temporary accommodation, and special educational needs.
A postcode lottery in who gets support
The picture also varies sharply across the country. Mr Phillips said that among people requesting support in 2024, around 20% in Middlesbrough received some form of long-term support – but in nearby Darlington the figure was just 4.5%.
Short-term help after hospital discharge also differs widely: in some areas, more than 40% of people who contact councils receive assistance; in others, fewer than 5% do. Mr Phillips said it shows a ‘postcode lottery’ in social care.
An ageing Britain and a warning on delay
Demand is likely to grow as the population ages. Sir Andrew noted there were just 61,000 people aged 85 and over in the UK in 1901 – rising to 1.447million by 2011 – and expected to hit 3million by 2030.
He argued another review is not needed just to confirm what should be done, saying the main barrier is finding the money and reaching a political settlement. He also suggested making social care completely free, like the NHS, would probably be too expensive under current financial constraints.
But he urged Mr Burnham to introduce a system that properly funds means-tested care and pools the risk of catastrophic costs – and rejected the idea that families can simply take on more. Millions already provide unpaid care, and formal support can help families keep going when needs become too complex.
Sir Andrew described social care as ‘the biggest unresolved, massive market failure and failure of public policy in British domestic policy.’ And his advice to Mr Burnham was: “Just do it, and don’t let the best be the enemy of the good.”
