British households may have to pay an extra £2,000 in tax due to the financial pressures created by the UK's ageing population, according to a new report. The Institute of Fiscal Studies and the Health Foundation state that the NHS requires a critical increase in government spending, simply to cope with the growing number of older patients and rise in staff needed.
The Independent reported that IFS Director, Paul Johnson said, “If we are to have a health and social care system which meets our needs and aspirations, we will have to pay a lot more for it over the next 15 years.
This time we won’t be able to rely on cutting spending elsewhere – we will have to pay more in tax."
This comes after reports that the NHS has been struggling to cope after the toughest financial constraints in 70 years, with the prospect of a 40 percent increase in hospital admissions and longer stays for individuals with long-term conditions.
The authors of the report shared that previously, Britain had paid for increased NHS spending, by essentially cutting funding in other areas. However, there is now no more room to make cuts in other areas, including housing or defence.
'Historically high levels'
The authors of the report shared that paying for a “modernised NHS” would increase the UK tax as a share of GDP to “historically high levels.”
Funding the health spending means households would need taxes to rise by 1.6 to 2.6 percent of GDP, or, the equivalent of £1,200 - £2,000 per household - or 3p in the pound on each of income tax, VAT and National Insurance by 2033.
Household incomes are expected to rise by £8,500 between now and 2033-4, with a quarter of that figure going on the extra tax to pay for the NHS. Previously, the NHS budget has seen a rise in annual growth of 3.7 percent, but the last eight years have seen a slow growth of 1.7 percent.
The NHS Confederation commissioned the report and it represents 85 percent of NHS bodies.
Its Chief Executive, Niall Dickson said, “This report is a wake-up call. And its message is simple – if we want good, effective and safe services, we will have to find the resources to pay for them.”
'A decade of misery'
The report analysis found that by 2033/34, there will be 4.4 million more people in the UK aged 65 and over.
In addition, the number of people with complex long-term conditions is also set to rise sharply. Without the tax increase, IFS stated that there will be "a decade of misery" in which the elderly and vulnerable will be let down dramatically.
Johnson went on to say that Britain was "finally facing up to one of the biggest choices in a generation." Prime Minister Theresa May has promised a long-term funding plan for the NHS, and this is expected to cover the next decade. It is expected as soon as next month.
