The majority of pensioners should see their winter fuel allowance cut to help fund a reformed system of care for the elderly, a former minister has said.
Liberal Democrat MP Paul Burstow said targeting the allowance for all but the poorest of pensioners would help pay for a fairer system of state support for old age care.
Mr Burstow, a former care minister, said the move would help meet the cost of implementing the findings of the Dilnot Commission, which proposed capping the amount individuals have to pay for care during their lifetime.
In a report by the Centre Forum think tank, Mr Burstow suggested setting the cap at £60,000, higher than the £35,000 proposed by the Dilnot Commission, saving the taxpayer up to £1.5 billion a year. Currently, elderly people in England have to contribute to their own care costs if they have savings of more than £23,000.
The Centre Forum report suggested the costs could be met by ending the universal entitlement to winter fuel payment and granting it only to those receiving pension credit.
The report said: "The Government needs to be clear in its message that a reformed capped funding system is the most appropriate way of dealing with a broken social care system, a crisis that has lasted over 10 years."
It added: "The Treasury needs to grasp the 'best opportunity in a decade' provided by the Dilnot Commission, the goodwill expressed by the financial services industry and by care providers. Most importantly it should pay heed to the views of thousands of people who risk losing their entire life's work through having to pay for unexpected and unlimited care costs. The Treasury must understand that the care funding crisis is one which will only worsen."
Mr Burstow told the BBC Radio 4 Today programme he believed the coalition would adopt some form of the Dilnot proposals - and the reforms could be one of the Government's greatest legacies.
He said: "A cap at £60,000, plus a means-test being lifted from its current £23,250 to £100,000, would actually cost about £8.4 billion in the life of the next Parliament and we can meet that by having a trade-off, between those currently receiving the winter fuel allowance and not receiving it in the future but actually that being targeted on the poorest and the savings being used to ensure the frail, those who have dementia, those that are disabled, can have the peace of mind of knowing they don't face those catastrophic care costs."
Mr Burstow said there were 100,000 pensioners with incomes over £100,000 and questioned whether it was right for them to receive a universal winter fuel allowance - when many admit it is spent on other things.