Demographic change means that more people will live past the point where they will require care because they become mentally or physically infirm. The society will need to find new solutions to funding social care and looking after older people. This is not a temporary issue that will go away and there are no quick economic fixes. In the UK it is estimated that the population aged 75+ will double from 5m to 10m by 2040. Financial buildings blocks are needed to pay for social care that will be sustained for decades and provide extra security.

This paper proposes a new savings product called Personal Care Savings Bonds (PCSBs). They are designed to encourage saving for social care by providing extra money at the time of greatest financial need. PCSBs are likely to be attractive to older people who have only a basic pension and modest savings, but also to other age groups as they not only attract interest but also pay prizes. The paper shows how the fund could build into a substantial investment worth £70bn with regular monthly prize pay outs.