Quarter Of Homeowners Funding Social Care With Home Equity
Almost a quarter of home owners are planning to use the equity in their homes to fund their care costs in later life.
24% of unretired homeowners would prefer to use the equity in their homes than deplete their pension pot when looking to fund the costs associated with old age.
The research also indicated that fewer people are looking to downsize by choice and would prefer to remain in their homes indefinitely. 85% of unretired respondents would like to continue living in their current property, this figure has risen by 3% in the past year with many deterred by Brexit delays and political instability.
Whilst political uncertainty permeates throughout society, fewer people are looking to leave their homes, preferring to use the equity as opposed to other later life income streams.
In fact, confidence in pension funds seems to be dwindling in the modern world. With many assuming their pension would be unable to cover the cost of later life, under a third (32%) are reliant on this money, a figure which has fallen by 5% when compared with a year ago.
Many still remain confused as to how they will confront and approach later life spending with 24% unsure as to how they will fund their care in later life, increasing from 18% in 2018.
As society remains uncertain, people are looking to the money locked within their homes as a tangible solution. 40% of homeowners are likely to unlock money in their homes at some point in the future whilst 23% more homeowners used equity release in the second half of 2018 in comparison to the first half; a figure likely to improve in the future.
Alice Watson, Head of Marketing and Communications at Canada Life Home Finance, said:
“With the future of long-term care in the UK still not clear, people who view their wealth holistically are increasing their ability to fund later-life care options. These findings are a real vote of confidence in the home finance industry: consumers are clearly attracted to the flexibility and security offered by later life mortgages.
“We know how much people value being able to live in the comfort and familiarity of their home. When care provision is in question, the disruption and emotion of someone having to leave their home is best avoided if at all possible. With lifetime mortgages, homeowners can age in place, while accessing the cash that will allow them to fund care solutions for them or their loved ones.
“These findings are significant because they reflect the views of those soon to enter retirement, many of whom will be contemplating some of the challenges later life may bring. It is really important that people speak to an independent financial adviser when deciding whether to use equity release to pay for care costs.”
How important is equity release to UK society? Does more need to be done to help support a sustainable social care solution?