Equity release a possible funding solution for care in the home

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. Key Retirement Solutions suggests looking at equity release as a possible solution to fund care in the home.

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: "Many pensioners who require care do not want to move away from their family and friends in order to receive it. Often people have lived in the area for a long time and the upheaval can prove very stressful and upsetting. 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.

"While equity release can provide a certain element of financial freedom in retirement it is not always the right solution for everyone. The way in which care is funded and provided should be carefully considered. We believe nobody should commit to equity release without first seeking independent financial advice. Our independent guide to releasing equity from your home is the best place to start for anyone investigating the option of equity release and discusses the alternatives too. This can be obtained by calling 0800 531 6010 or visiting our website where the guide can be downloaded at keyrs.co.uk."