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Last Updated: Tuesday, 14 September, 2004, 12:06 GMT 13:06 UK
Tories offer free long term care
Pensioner in post office
The Tories have unveiled a package of measures aimed at pensioners
The Conservative Party has unveiled plans to provide free long term residential care for the elderly.

People would have to take out a three-year government-sponsored insurance policy to qualify.

The move would end the need many elderly people currently have to sell off their homes to pay for care, Tory leader Michael Howard said.

Launching the policy Mr Howard also said his party was still committed to linking the state pension to earnings.

Mr Howard was "absolutely confident" the measures were affordable.

He said the Tories would create a new Lifetime Savings Account (LISA) under which the government would match any savings put in by individuals for their old age.

The current system is unfair. It encourages people to run down their assets. It penalises people who have saved
Mr Howard

Under the Conservative proposal for long term care, people would be expected to take out an insurance policy to cover the first three years of their residential care.

After the three years, the government would meet the cost of all further years of residential care.

Those on lower incomes could still receive free means-tested long term care.

"For many people, the last few years of their lives can be spent in residential care," Mr Howard said in Westminster as he unveiled a package of measures aimed at the elderly.

'Indignity'

"Without proper planning, that can end up meaning that someone's entire life savings and property are used to pay for care," he said

"Forty thousand people suffer this indignity every year.

"People who take out an insurance plan that meets the cost of three years' long term care would be guaranteed free long term care by government beyond these years," he said.

"The current system is unfair. It encourages people to run down their assets. It penalises people who have saved," he added.

Full details of the party's plans are due to be published in a consultation document, possibly at the annual Conservative conference in Bournemouth next month.

Tory party officials say the policy which would give state support to those who take out a three-year insurance plan would cost around 240m.

But they believe that removing the incentive to avoid the existing rules would save several hundred million pounds making the policy revenue neutral, officials say.




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