According to the ERC, 38 per cent of over-55s accept they could not afford to pay for long-term care, although the remainder are unrealistically optimistic about the ability to do so.
While the average estimate for this age group of the cost of long-term residential care is £16,027 per year, the average yearly bill is £12,340 higher, at £28,367, compared to the average yearly income of £18,132 among people aged 55 and over.
Given this, Nigel Waterson, ERC chairman, said: “The vast reserves of housing wealth held by over-55s in the UK can ease many otherwise challenging situations, and more people are already taking steps to use their property wealth to raise their living standards in later life.”
As a result, he added, advisers will be increasingly called on.
He said the ERC and its members already ensure that anyone considering equity release receives both regulated advice and independent legal guidance in person while they assess the benefits of taking out a loan.
Although the government’s draft Care Bill currently makes no stipulation that those in need of long-term care must be directed towards regulated financial advice by their local council, Mr Waterson underlined that regulated advice should be a minimum requirement in the new Care Bill for anyone needing to fund long-term care.
Lorreine Kennedy, director of Carematters in St Albans, said: “We have reached a point with this age group where they will have to stop regarding their properties as legacy assets, simply to be passed on to their children, and as part of their liquid asset portfolio, to utilise when they are alive in order to make their lives better.
“As such, it is vital that they receive the best regulated advice possible, and there is no doubt that this – as a bare minimum – should be included in the parameters of the Care Bill.”
- 85 per cent of over-55s have made no plan at all for financing long-term care
- 19 per cent would consider selling their home to pay for care bills
- The average over-55’s property is worth £230,862, opening up the potential to access an average of £61,178 through an equity release plan
- 40 per cent go to a financial adviser when facing an important decision