George Osborne brings forward major pension and care reforms ahead of Budget Mr Obsorne has announced that the level at which inheritance tax becomes payable will now be frozen at £325,000 until at least 2019 to pay for the care proposals recommended by Andrew Dilnot, the head of the commission set up to reform the system. "Tomorrow we're going to say that we're going to bring forward the Dilnot cap, the so-called cap on social care costs so people are protected from the rather random costs of getting a disease late in life and seeing your home sold to pay for those care costs," Mr Osborne said. So we will bring the Dilnot cap forward to 2016 and indeed reduce the cap to £72,000. In other words you have to pay £72,000 of care costs but after that for the rest of your life those care costs will be covered by the state. And we're also bringing forward the single-tier pension, we said it was going to come in later, it's now going to come in in 2016. Mr Dilnot had previously recommended a cap of £35,000, but this was blocked by the Treasury which said it was unaffordable for taxpayers. The Government has claimed that the introduction of a cap will allow pension and insurance companies to offer policies to people to cover the costs of care, should it be required. Conservative MPs had been urging George Osborne to reconsider how the scheme will be funded. The Chancellor pledged previously to increase the tax-free inheritance tax limit to £1million, but this promise has now been scrapped. Mr Osborne added: "That's a generous pension for pensioners. It's a huge boost for people who want to save for their retirement. That's another example of how this Government is helping people who want to save, people who want to leave something to their children like their home, people who want to get on in life, people who do the right thing and those two decisions are going to be enormously helpful to people. The flat-rate pension was first promised in 2011, but final details of the scheme have been repeatedly delayed. The scheme is designed to benefit self-employed workers and women, however, some people could end up paying hundreds of pounds a year more in national insurance to fund the shake-up.