Families are becoming more concerned about how to fund care in for elderly relatives, with over three quarters of over-55s (77%) wanting to prefer to stay in their current home rather than move, equity release adviser Key has found.
The report entitled ‘Cracking the Care Code’ showed about 44% said they would use savings and investments to fund some or all of their care, 40% believe their pension income will be enough and around 19% said they would need to use property wealth.
Will Hale, chief executive at Key, said: “The big issue that all generations face is how to find the most appropriate care and more crucially how to fund it.
“It is an issue that the current government is committed to tackle and that local authorities are grappling with every day but the scale of the problem is huge.
“Increasingly we are seeing people use housing equity to fund essential later life expenditure and with over-65s currently owning un-mortgaged property worth £1.1 trillion we anticipate that property wealth will have a greater role to play in how people meet care costs.
“Already we find that two-thirds of equity release customers use some or all of the equity they release to make home or garden improvements – helping to ensure their property can meet their changing needs.
“While few people want to consider the prospect of needing care and how they might meet this cost, it is vital that they do. Starting to think about care funding early, speaking to their families, considering all the funding options available and getting good advice is essential.
“This will help people to crack the care code and ensure that they make considered sustainable choices about what is a very emotive topic.”
More than half (56%) of adults aged between 30 and 55 have discussed the potential need for care in later life with their parents and nearly one in five (18%) say families will either fund their parents’ care or have parents living with them.
Just 3% of over-55s who have considered their care choices say they would move in with children. While some over-55s have thought about the need for care, their plans around how they might finance it are less developed with just 21% saying they have made any provision for care.
An optimistic 13% believe they are wealthy enough to fund care if they need it, which may prove difficult if they need to go into a residential home (c. £30,000 per annum) or need nursing care (c. £40,000 per annum).
A government Green Paper setting out proposals on social care for older people to “ensure that the care and support system is sustainable in the long term” is due to be published. It was first announced in the March 2017 Budget.
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