Canada Life has reported that 55% of the million over-60s who say they are rethinking their care plans as a result of Covid-19, are undecided on how they will fund it.
The research found that 19% of those who were previously open to care homes as an option for their family members before the crisis hit, now wouldn’t consider it. Instead, they are looking to either move into assisted living (19%), or smaller and more manageable properties (19%). Moving in with family members was also a popular option, with nearly one in 10 (9%) looking to move into a spare room, and 6% looking to move into a granny annex.
However, despite the growing need for care in later-life and the average cost estimated at £600-800 per week, 55% still haven’t considered or don’t know how they will fund it.
For those who have considered it, 21% expect to use their state pension of just £175.20 per week, 15% expect the government to pay for it, and a further 15% expect to use their cash savings.
Only 5% of over-60s plan to use equity release to cover the cost of care. But Canada Life argues that equity release could allow those in and approaching retirement to unlock the wealth stored in their homes to help with care costs; on average people are releasing £102,443 as a lump sum. However, the research shows that there is still a knowledge gap when it comes to later-life lending products, with 8% of over-60s unsure of what equity release is and how it can be used to meet their care needs.
Alice Watson, head of marketing, insurance, Canada Life said: “With people living longer lives and retirement now lasting up to several decades, the reality is that the majority of us will have to pay for later-life care at some stage – whether that be for ourselves or loved ones. This pandemic has changed the way we’re thinking about our futures and how we want to spend them, and ultimately, it’s the industry’s responsibility to ensure advisers have the tools to engage with their clients effectively, offering them the most suitable solutions. It’s about getting people to think about their wants and needs in the different stages of retirement and kick starting these conversations early on – no matter how difficult they might be – and this is where advisers have a significant role to play.
“As an industry, it’s important we highlight how equity release can be used to meet the needs of an ageing population, by allowing people to age in their homes, while accessing cash to fund residential care solutions for themselves or family members. There are a growing number of flexible solutions available to help customers who are looking to unlock equity from their homes and advisers are well placed to help them find the best suited product for their unique circumstances.”