Care cap could be paid for by inheritance tax freeze

The coalition will announce that elderly care bills are to be capped by the state in a £1 billion move expected to be funded by dragging more people into inheritance tax.

To the disappointment of many campaigners, the cap will be set at £75,000 - more than double the £35,000 recommended by the independent Dilnot Commission.

But thousands more people will be hit with inheritance tax bills because of a three-year extension of the freeze in the £325,000 threshold - £650,000 for couples - at which it kicks in at 40%.

Alongside the cap, Health Secretary Jeremy Hunt is to announce a large rise in the assets threshold beneath which people receive means-tested support meeting care bills. Currently £23,250, that is set to rise to £123,000.

He added that the current situation was a "scandal" in which 30,000 to 40,000 people a year have to sell their houses to pay for their care costs.

Mr Hunt said it would be a "fully funded solution" and one that would pave the way for insurers to provide a system of cover for elderly care.

The National Pensioners Convention (NPC) described the social care reforms as "about as credible as a Findus Lasagne".

Shadow care and older people's minister Liz Kendall said a "bigger and bolder response" was needed.