Sarah Bradford explains how the new health and social care levy will work and outlines the associated tax and National Insurance contributions increases.
In early September, Boris Johnson set out the government’s plans for healthcare and adult social care, including a new funding plan. These include, from October 2023, a cap on the amount that an eligible person will have to contribute to the costs of personal care over their lifetime. This is to be set at £86,000.
In addition, a new levy is to be introduced from April 2023, with associated tax and temporary National Insurance increases coming into effect from April 2022, to provide ring-fenced funds for health and adult social care costs. However, it should be noted that as with National Insurance contributions (NICs), current contributions pay current costs; the individual does not build up a designated pot to fund their own future health and social care needs.
