Equity release can pay for care

The Daily Telegraph reported this morning that ministers are effectively reducing the level of savings above which pensioners must meet their own care fees – potentially forcing many people to fork out thousands to fund care in their retirement.

Dean Mirfin, group director at Key Retirement Solutions, said: “I think we’re on the cusp of the government seriously looking at equity release now. As an industry we have to think about how we can take advantage of that.”

SHIP’s director general, Andrea Rozario, said the trade body would be seeking to engage with the government following comments yesterday from Lord Warner, who is drafting plans to reform the elderly care system.

He said the “big chunk of potential” funding currently locked up in housing would have to be considered.

Rozario said: “I do think the government has a much improved understanding and acceptance of the role that equity release has to play and it’s climbing up the political agenda. The problem is the government doesn’t think the products are quite there yet.

“We need to engage more with them on how to develop equity release in a way that fits the need to ensure it remains on the agenda in a way that can be used. But it’s a good thing that government is now willing to look in more detail at this industry and find out about the product and where it can fit. That’s encouraging.”

Vanessa Owen, head of equity release at LV=, added: “I think we need greater clarity about what these care costs are and the government could help provide that. From an adviser perspective the first thing you need to know is how much money is needed and it’s not that easy to get that information at the moment.”