In a report by The Centre Forum, former care services minister Paul Burstow claimed £500 million could be saved every year if the money was re-routed to long-term care and used alongside a cap of £50,000-£60,000.

The think tank argues universal pensioner benefits such as Winter Fuel Payment, targets many who do not need assistance and should be reformed to help those in real need.

The report also proposed ending the universal entitlement to Winter Fuel Payment and linking receipt of this benefit to those who receive Pension Credit, paying it as a lump sum at wintertime and incentivising those entitled to pension credit but not receiving it to take it up.

This move would create savings of up to £1.5 billion each year – which could be spent on reforming the financing of care.

In addition, the report advocated limiting 86% of free TV licences to raise £500 million and raising £600 million through the ending of Capital Gains Tax relief.

Burstow said: “Social care isn’t free but it could be a lot fairer for those who have worked hard all their lives.

“Placing a cap on the amount people have to pay for care would protect people from the catastrophic costs they face now. But to make this vital and long overdue change, we have to find the money from somewhere. By concentrating the winter fuel payment on those eligible for pension credit we can pay for a cap on care costs.”

However, critics have claimed such a move could penalise current pensioners and deter people from saving – worsening the pension crisis.