It’s safe to say that the issue of long-term care has long been a thorny topic for those in power, and a point of concern for the general populous - something the pandemic has only served to amplify the underlying issues surrounding care provisions for a vulnerable section of society.
It's a trend highlighted by the Equity Release Council’s new report, ‘Solving the social care funding crisis, perspectives on the contribution of property wealth’.
Research released by Canada Life last year highlighted the shifts in landscape that have occurred as a result and which (like working patterns) could become a mainstay of regular life, as and when relative normality resumes. The research has found that 55% of those questioned were rethinking their care plans as a result of COVID; 19% of those previously open to care homes were now erring away from it, and of that particular sub-section 38% were looking to move either to assisted living or to smaller and more manageable properties.
It also comes at a time when people are accessing and draining their savings at an alarming rate, to the extent that the pensions regulator has expressed concern that 42% of pension pots are being raided at ‘unsustainable’ rates (i.e. at more than 8% annually). This is naturally understandable given the wider environment, but raises the question: if existing savings are being regularly accessed to fund everyday expenses, how will both current and future retirees fund any care provision they may need in later life?
Research from SunLife has shown that over the past 20 years over-50s homeowners have seen their average property value rising from £113,000 in 2000 to £240,000 in July 2020.
CEO, Pure Retirement
Looking at the wider landscape, housing equity is a natural conclusion, given the state of over-50s property ownership. Additional research from Canada Life released in October has highlighted that there’s a combined UK total of £591bn of unreleased equity (with the South East totalling £123bn – the equivalent of £107,966 per household).
These figures highlight the level of property wealth held by those in later life at present, and by extension the degree to which it could potentially be used to fund their care in the future. Additionally, research from SunLife has shown that over the past 20 years over-50s homeowners have seen their average property value rising from £113,000 in 2000 to £240,000 in July 2020.
With care costs sitting at around £600-£800 a week, and 55% of those surveyed by Canada Life not knowing how they’ll fund it.
CEO, Pure Retirement
There’s still a lot of work to be done in bridging the knowledge gap between the equity release industry and the wider public, however. Many either hold misconceptions or aren’t aware of the ways it could potentially be used as a retirement planning tool, meaning that greater consideration needs to be given in terms of raising awareness of its potential uses and the possibilities it gives for people to receive the levels of care they desire or need, rather than what they can afford.
With care costs sitting at around £600-£800 a week, and 55% of those surveyed by Canada Life not knowing how they’ll fund it, it’s arguably more important than ever that the wider public has a full understanding of all available options open to them.
The Equity Release Council’s new report, ‘Solving the social care funding crisis, perspectives on the contribution of property wealth’, is available now.
Pure Retirement also have their own wealth of free-to-access adviser resources, accessible through both the Adviser Toolkit and Media Centre sections of their website.
