• Open Access

The Role of Private Finance in Paying for Long Term Care


  • We gratefully acknowledge the helpful comments of the two anonymous referees. This article is based, in part, on work undertaken at the formative stages of the 2009 Green Paper on behalf of Department of Health in 2008, and on subsequent research commissioned by the City of London and discussed at an event chaired by the Lord Mayor held at Mansion House in September 2009.

  • Re-use of this article is permitted in accordance with the Terms and Conditions set out at http://wileyonlinelibrary.com/onlineopen#OnlineOpen_Terms.

Corresponding author: Les Mayhew, Faculty of Actuarial Science and Insurance, Cass Business School, 106 Bunhill Row, London, EC1 8TZ, UK. Email: lesmayhew@googlemail.com


An ageing population and increased longevity means that long term care will become progressively more expensive. In 2009 the Government published a Green Paper on future funding options and a White Paper in 2010. This article considers the role of private finance products under the ‘Partnership’ option. It finds that few households are able to pay for LTC based on income and savings but the number increases if housing assets are included. We show that products can be devised for a range of circumstances, although state support would need to continue. We propose a simplified means testing system based on a combination of income and assets.