Only one in 10 people in England who fund their social care costs would benefit from a £72,000 cap on the amount they have to pay and a more generous system should be introduced instead, the charity Independent Age said.
Research found that it would take the typical pensioner six years to reach the cap, which is double the life expectancy for someone in residential or nursing care.
The charity proposed a higher cap at £100,000 but crucially it would have a wider scope, covering daily living costs and would benefit four times as many people within two to three years.
Although plans for a £72,000 cap were set out in legislation, its implementation was delayed until 2020 and in the General Election campaign Theresa May ditched it – only to be forced into a U-turn by the backlash against her so-called “dementia tax” proposals.
A consultation on how to proceed was announced in June’s Queen’s Speech which is expected to consider both a “floor” and a “ceiling” for care costs.
The research by Independent Age and the Institute and Faculty of Actuaries (IFoA) concluded that an “all-inclusive” cap set at £100,000 would create certainty for those needing care.
Independent Age chief executive Janet Morrison said: “Without an all-inclusive cap, people with the highest care needs will continue to see their costs rise well over £100,000.
“In the green paper on social care, the Government must urgently set out plans to introduce a cap on care costs that covers all costs and will realistically be reached within the lifetime of an individual in care. Only then will a cap make a material difference to the lives of older people in care.”
IFoA president Marjorie Ngwenya added: “If the Government hopes to encourage people to be prepared to meet some of their social care costs in old age, it must provide clarity around the care cap level along with clear, easy-to-follow guidance on what this covers.”
A Department of Health spokeswoman said: “This Government is absolutely committed to improving social care and has provided £2 billion in additional funding over the next three years. We will soon be consulting on sustainable reforms to the system and this will include options around what people will pay for care.”