Equity Release and Care

Ever since Andrew Dilnot produced his report on funding old age, anyone connected with the provision of care and the finances of older people have held their breath waiting for the government response. Unfortunately, when it did come, it was underwhelming to say the least and many people expressed frustration that the issue seemed no closer to being resolved.

Short of making a decisive statement, the government has committed only to addressing the issue before the end of this parliament in 2015.

 An announcement to mollify critics and to allow themselves more time was that of the extension of the existing local authority loans scheme which are raised against the value of a property and used to pay for long term care. This has obvious ramifications for the equity release market as it raises the issue of paying off loans using your housing wealth.

If this goes ahead it will help to 'normalise' one of the central tenets of equity release - unlocking the wealth people have built in their property while they are still around to benefit from it. Existing equity release schemes can be used to fund a whole range of expenses, including the cost of care, and this will hopefully help equity release become accepted as a standard part of retirement planning.

However, it is important that people always receive expert advice on any form of equity release scheme. The equity release industry has built up a network of specialist providers, intermediaries and solicitors to help people make what is a major decision that needs careful consideration. It is important that such a network of advice is available for the council loan scheme and that people make informed choices on something that is so important.

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