Print friendly version 14 May 2008

Equity release hailed as solution to social care problem

Equity release should form part of the Government’s strategy to improve social care in Britain, according to equity release specialists Home & Capital.

Following Prime Minister Gordon Brown’s announcement on Monday that Britain’s social care system needs “radical reform”, Home & Capital emphasised that equity release – which allows older, unmortgaged homeowners to access the equity in their property – provides a solution to the increasing demands for care for the elderly, as it allows people to use the value in their property to remain in their own homes and retain independence.

Gordon Brown also said that he wanted people to be able to save for old age “in a way which insures them and protects their houses and their inheritance”. For homeowners over the age of 65, 78% of their net wealth (excluding pensions) is tied up in their homes, according to Alliance & Leicester.

Simon Little, business development director at Home & Capital, said: “Some older people are facing the added distress of being forced to sell their homes to cover the rising costs of such care. Clearly this is not an acceptable situation for those who wish to remain in the homes they have worked a lifetime to buy.

“Equity release offers a solution whereby elderly homeowners – many of whom are reluctant to seek financial support from family - can stay in their own homes and, where required, use the equity in their properties to cover the costs of care.”

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