The report stated that many of those surveyed "thought that a small amount of money paid throughout their working life would not be missed and was therefore more acceptable than alternatives which were perceived as a big financial shock because they involved large sums of money".

Through the current care place system, which is means-tested, 70,000 people annually are forced to sell their properties to meet care home bills of £500 per week and more.

Age Concern's report considers this system to be unfair as it "was perceived to penalise the thrifty and those who have worked hard throughout their lives, thereby acting as a disincentive to save".

The director of Age Concern, Gordon Lishman, commented: "There is a significant role for taxation in paying for better care, for people who are unable to pay the costs themselves. Most people would prefer at least some of the costs to be paid for collectively in order to pool risks."

But Mr. Lishman did believe that further research would have to be undertaken "to find out whether young people who are raising families and just starting to get on to the housing ladder agree".

The current care system costs the taxpayer £15 billion and is likely to double in the years to come due to the ageing population.

The government is presently looking into ways of reforming the means-tested system. But how does it work now? The national charity Counsel and Care, author of Caring for Loved Ones in Old Age, outlines the current system.

What is the basis of the current system?

In England and Wales, if you can afford to pay your own fees, you must do so out of your own funds, but you may be eligible for state support if your finances are below a set threshold of income and capital savings.

If you have nursing care needs, and have been assessed by your local Primary Care Trust, you will receive a contribution per week towards the cost of the fees.

If you have very intensive nursing care needs, and have been assessed as being eligible for what is called 'continuing care funding', all of your care home fees will be paid by your Primary Care Trust.

In Scotland the system is different. The NHS covers the cost of any nursing care you receive while you are in the care home and the local council, who assesses your care needs, will provide care services free of charge.

But you will have to pay for any additional services you choose to receive, and for your bed and board' costs (e.g. meals, washing, etc.).

How does the council assess my finances?

Before a financial assessment, you must have a needs assessment, which outlines your individual needs and, as a result, what services are needed from a particular care home. It will also narrow down the options available.

To request a needs assessment, for you or for a relative, contact the duty social work team in the social services department of the local council where you currently live.

The financial assessment will work out how much you own in terms of savings, investments and property, and will establish how much money you will be expected to contribute to the cost of your care home fees.

If you have less than £13,500 in capital and savings, the full cost of the care home will be met by the local council. In this situation all of your weekly income will be taken as part of the payment for the care home, apart from a weekly amount of £21.15, known as a 'Personal Expenses Allowance'.

This can be used to pay for any personal items needed. For some people who have made modest savings, they may be eligible for Pension Savings Disregard, which is worth up to £5.45 a week, and which is added to the level of the Personal Expenses Allowance.

If you have between £13,500 and £22,250 in savings, investments or property, you will need to pay a proportion of the care home fees, and the local council will pay the remainder. Again, any income you receive from pensions and benefits will be taken into account and will also be used to meet the cost of the care home.

Some types of income are not included in the calculation because they are known as 'disregarded income'. These include:

• The mobility component of Disability Living Allowance
• (War Pension Scheme) Mobility Supplement
• Special War Widow’s Pension
• Some charitable payments
• Pension Savings Disregard

The council will work out what is known as a 'tariff income', which means that for every £250 between £13,500 and £22,250 you have, you will be regarded as having £1 a week income.

If your total savings, investments and property are worth more than £22,250, you will have to meet the full cost of the care home fees. If your capital is less than £22,250, but your weekly income is above the level of the care home fees and Personal Expenses Allowance added together, you will be expected to meet the full cost of the care home fees from this income.

Find out more about finding and paying for a care home, plus paying for home care service, as well as welfare benefits for the elderly and for carers, in Counsel and Care's advice guide Caring for Loved Ones in Old Age.

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