UPDATE 2-UK weighs 20,000 pounds charge for elderly care

* Compulsory charge one of three options being considered

* Need to tackle growing care problem as population ages (Adds comment from accountants, paragraphs 10-11)

By Ben Hirschler

LONDON, July 14 (Reuters) - Britain may introduce a compulsory charge of up to 20,000 pounds ($33,000) per person payable on retirement to cover the cost of care in old age, health minister Andy Burnham said on Tuesday.

The proposal, which would see everyone who can afford it paying between 17,000 and 20,000 pounds, is one of the three options being considered alongside a top-up payment system and an insurance-based approach.

"We are proposing a radical reform of care ... we need a system that's fair, simple and affordable for everyone," Burnham said.

Under the current system, some people have to pay tens of thousands of pounds, or sell their house, to pay for care in old age, since those with homes or savings worth more than 23,500 pounds must pay for their own care.

On average, Britons spend 30,000 pounds for care but 20 percent pay more than 50,000 pounds and those who develop serious conditions like Alzheimer's can pay more than 200,000 pounds.

Caring for the country's ageing population is a big and growing business for operators of care homes, such as Southern Cross (SCHE.L), Care UK (CUK.L), Nestor (NSR.L), Claimar Care CCGP.L and Mears Group (MERG.L).

Experts say the current system is a lottery and not sustainable in the long-term.

"With the ageing population and a diminishing workforce to support the elderly there's going to be a significant shortfall," said Gris Glasper, an industry analyst at stockbroker Brewin Dolphin.

"Either the price of care needs to come down significantly or something else needs to be addressed, and that is an increased burden on the individual."

Amanda Kelly, a partner at PricewaterhouseCoopers, said the move towards an insurance-funded model could work, but only if a large proportion of the population was covered.

"Without incentives or compulsion, this option may prove to be just too expensive to create," she said. "Unless the national care service provides the services people want, there is a risk that they will not buy into the 'contract' and will not pay."

The opposition Conservative Party said Burnham's so-called green paper on care simply started another debate rather than taking hard decisions now.

In addition to the idea of compulsory payments, the two other options proposed are a partnership arrangement, where the state would provide between a quarter and a third of the cost of care, and a voluntary insurance scheme, which would cost individuals 20,000-25,000 pounds.

Stephen Haddrill, director general of the Association of British Insurers, said the insurance industry "stands ready to work alongside the government to provide a realistic and sustainable solution". (Reporting by Ben Hirschler and Ben Deighton; Editing by Rupert Winchester)