Andrea Rosario, director general of Safe Home Income Plans, said: “The Dilnot Report is absolutely right: with our growing and ageing population, the State is not able to pay for everything, and there is an urgent need to establish a new and more equitable system if we are to stave off the looming crisis. For this reason, the government cannot afford to ignore or put aside the messages of this report, as those in previous reviews have.
“We welcome the Commission’s findings and agree that a balance needs to be found on the sharing of responsibility for funding social care which allows people to contribute without penalising them for saving. The Report’s recommendation that care cost should never exceed 30% of a person’s assets achieves this balance. But the government needs to ensure that people are fully aware of what their options are and that they do not have to leave their homes to contribute to their care funding. Indeed, the Report highlights the importance of increasing awareness about saving for retirement and care early on so that people are as prepared as they can possibly be for it.
“Financial service options such as equity release therefore have a strong role to play in helping people to contribute to their care costs. The establishment of a Working Group, as the Report suggests, to look into the development of financial products that will help people to meet the cost of care is to be welcomed and I hope that SHIP will have the opportunity to play a part in this.”
Dean Mirfin, group director at Key Retirement Solutions, added: “We already get clients using equity release to pay for care and what we’re doing is to work closely with a number of organisations involved in the sector to make sure that there’s clarity over the part that equity release can play. We’re keeping a watchful eye on it and in particular what’s coming out of the government to make sure what’s said is not forgotten.”
Claire Barker, chairman of the Equity Release Solicitors’ Alliance, said: “The Dilnot Commission’s recommendations are to be welcomed. The current system is confusing, and so anything that clarifies how the costs of long-term residential care are to be split between the citizens and the State will help people with their retirement planning.
“A government stamp of approval on equity release will provide a strong endorsement for the market and will hopefully spread the message that equity release is a very attractive option for those looking to seek an extra £35,000 whether it be for the cost of care, education fees or whatever.”
Lord David Lipsey, chairman of the Financial Services Consumer Panel, added; “I strongly support the sweep of Dilnot’s proposals, which provide a basis for two essentials: a cross-party consensus solution and a partnership between the State and the individual in paying for care. I should prefer a rather larger share to fall on individuals and rather less on the State than he proposes, so as to free more money for better care services for the elderly.
“This will mean making full use of equity release so people can afford to pay their share.
“The precise numbers can be readily settled by further discussions. What is vital is that this, the last, best opportunity for a fair settlement to this toxic problem, should not be missed.”
Ged Hosty, managing director of equity release at Partnership, said: “For the equity release market, what the Dilnot Commission is doing is putting a lot of focus on the equity release industry as a means for funding long term care. It’s one of the more potentially important uses of equity release certainly. What equity release does do is enable people to use their own resources to decide their own provision for care which is an important facility.
“I think its very important for brokers to identify viable sources of income business wise. With the Retail Distribution Review and all the threats to the traditional model for brokers, I think that equity release is a growing market and it’s an area where new brokers can move into and serve a very important role right across the sector.”
