With the number of people over the state pensionable age on the increase, the need for a solution to funding long term care has never been so apparent. The current funding system can be complex and accommodation shortages can result in people having to move miles from friends and relatives in order to receive the care they require. The prospect ahead, unless there is a dramatic change, is that more and more people will look towards care in their own homes.
Currently, people over the age of 65 have £500 billion in un-mortgaged equity tied up in their homes, for those who wish to remain in their homes or fund residential care without having to sell their home where the spouse is still resident, equity release provides a very real solution.
Whilst for many, where care is administered may be a choice, in the future and for some even now, residential care may not be a straight forward option. Some councils have a clear shortage of beds. For example, according to the Resolution Foundation, the two councils with the lowest number of care beds per 1,000 of the over 65 population are Westminster (12.1 beds per 1000) and Kensington and Chelsea (16.4 beds per 1000). These are also the two areas with the most expensive residential property prices in the country. By releasing some of the equity tied up in their property pensioners will have more financial freedom to make certain choices regarding the care they require and where they receive this. London boroughs have significant low numbers but they are not alone. Should this problem continue care in the home will become an increasingly important part of the future of care in the UK.
Dean Mirfin, Key Retirement Solutions Group Director, said: " Equity release provides a solution for those who do not wish to move - by releasing cash tied up in their property, depending on the amount released, pensioners can then choose to either purchase care privately or stay in their own home and receive domiciliary care.”
