Families are increasingly concerned with how to fund care in later life for elderly relatives, according to equity release adviser Key.
In its new report ‘Cracking the Care Code’, Key has revealed that 56% of adults aged between 30 and 55 have discussed the potential need for care in later life with their parents and 18% say families will either fund their parents’ care or have parents living with them.
77% of over-55s say they would prefer to stay in their current home or move to a more manageable house. 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. 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).
Around 44% say they would use savings and investments to fund some or all of their care while 40% believe their pension income will be enough. Around 19% say they would need to use property wealth.
Will Hale CEO 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.”