Elderly people will no longer be forced to sell their homes to pay for care under a scheme proposed by the Conservatives.

In the Tories’ first new policy proposal announced before their conference, George Osborne, the Shadow Chancellor, says that all pensioners will be invited to buy into an insurance scheme costing £8,000 when they reach the age of 65, which will guarantee to pay out for residential care.

Members of the Home Protection Scheme, which will be voluntary, will have all their bills paid for, even if they have substantial savings and an expensive home.

They are banking on the projection that only one in five pensioners will need residential care. Typically elderly people who require residential care spend less than two years there at a cost of around £50,000.

Under the current means-tested rules, pensioners with savings of under £23,500 are given free care but those with more are expected to fund their own.

Experts said they were unsure the sums added up, just as they were sceptical when Gordon Brown announced earlier this week that all domiciliary care would be free for those elderly people judged to be in the greatest need.

They welcomed that, after years of being ignored by politicians, old age care now appeared to be at the top of both main parties’ agendas.

Shadow health secretary Andrew Lansley said that it would end a “major injustice” which each year saw an estimated 45,000 elderly people in England forced to sell their homes to pay for residential care.

Mr Lansley said: “This scheme is a genuinely huge step forward for England’s care system and will lift a major weight of worry from the shoulders of all older people and their families.

“In twelve years, Labour have failed to offer older people any hope of a way out of the forced home sales crisis. A vote for the Conservatives is now a vote for a real, affordable alternative to losing your home if you need to enter residential care.”

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