After all the column inches the Dilnot Commission’s White Paper garnered back in the summer, and the subsequent discussion around long-term care it generated, it feels like the issue has somewhat fallen off the media agenda in the months since. This may well be the calm before the storm but, as a nation, we cannot afford to ignore the social care crisis or the need to modernise the archaic framework for supporting older and disabled people. Successive governments have treated the long-term care issue as an elephant in the room, so it is vital that the issue is addressed if we are to start properly catering for older generations.
The equity release market has paid close attention to developments regarding the White Paper as there is a widely-held belief within the industry that home reversion plans and lifetime mortgages can help homeowners bridge the long-term care shortfall. Despite the uncertainty around what the Government is actually going to do, when any changes will be implemented and what the end cost is going to be, providers and advisers need to ensure they are up to speed on events as they unfold in order to be as prepared as possible. We have seen a number of advisers diversify into both equity release and long-term care as there is a fair amount of crossover between the two areas in terms of the age group of the clients involved and the importance of advice given that neither sector can be catered for by an off-the-shelf solution. As with equity release, long-term care plans are not for everyone, which is why the role of the adviser is so important.
Another area where there is common ground is where clients require domiciliary care, that is, treatment in their own homes or where there is no desire to move into a care home. Individuals in such circumstances will no doubt be exploring a range of different options, but equity release is certainly something they should be considering and this is where long-term care advisers who are also aware of the benefits of equity release come in.
There is much the general public has yet to learn about equity release, but one misconception that often crops up is that people seem to think they are at risk of being forced to leave their home before they die. This is emphatically not the case and if this knowledge gap can be plugged then equity release could start to look more attractive to those requiring long-term care. Not only can their properties remain their safe haven and the place where they receive care, but it can also help meet some of the costs involved too.
Options such as Bridgewater’s secured escalating plan can be used by those wanting an annual increasing income for a specific period of anything up to 15 years, which could help cater perfectly for those needing assistance meeting the cost of having care at home. It may well be that equity release is not the solution in every instance, but it is important that is at least considered as an option.
Chris Prior is manager of sales and distribution at Bridgewater Equity Release
