More than two-thirds (77%) of over-55s said they wanted care in their own home – either in their current home (57%) or in a more manageable property they would buy (20%), according to Key.

However, the equity release adviser said that, while it may be a cheaper option than care in a residential home, where average costs start at £30,000 a year, under the current means-tested care funding regime a significant number of people will need to meet this cost themselves.

Have you made care provision?

When asked only 21% of over-55s have made financial provisions for care, while 13% thought they were wealthy enough to cover it.

Interestingly, 8% felt they would not need care in later life of which 21% expressed concern as to how they might meet these costs and a further 15% had ‘no idea’ how they might pay for care.

Currently, over-65s hold £1.1 trillion worth of un-mortgaged property wealth which suggests that for some equity release will play a significant role in meeting these unbudgeted for costs.

Deferred Payment Schemes

In 2015 deferred payment schemes were launched by local councils as part of the Government’s commitment not to force people to sell their home in their lifetime to pay care home bills. But just under 7,000 deferred payment schemes are in place across England, Wales and Scotland despite there being just over 11.5 million over 65s in the UK.

Will Hale CEO at Key said: “While 77% of over-55s would prefer to stay in their home if they need care, the vast majority of people do not appear to have made any concrete plans around how to fund this. NHS Digital figures suggest that there are 1.31 million new requests for care and support from the over-65s each year but currently, only 175,256 people have their care fully-funded by local councils.

“This leaves a significant cohort of people who have made no provision to pay for care but won’t receive help from their local authority.

“By choosing a lifetime mortgage a customer is not only able to fund care in later life but they are also able to receive care in their chosen location, their own home.”