Retirement Income  

People should downsize to fund social care, says MP

People should downsize to fund social care, says MP

People should not have to sell their home to fund social care but could instead downsize and receive care at home, according to Conservative MP Damian Green.

Speaking at a social care event at the Centre for Policy Studies last night (July 16), Mr Green discussed proposals to fix the care crisis which were laid out in his Fixing the Care Crisis report on April 29.

At the event, Mr Green stressed that people should not be forced to sell their house to pay for social care costs but could instead downsize and release equity to pay for care but still have an inheritance to pass onto their children and family.

Also speaking at the event was Baroness Camilla Cavendish of Little Venice, former director of policy under prime minister David Cameron, who agreed that there needs to be more emphasis on keeping people in their own homes rather than building more care homes.

She said: "Nobody should have to sell their home to pay for care but the reality is that lots of people have to find some way to fund the level of care that they need."

Mr Green highlighted that people often took a bad view on the idea of downsizing but he said this need not be the case.

He said: "People need to ensure that their last home is the best one for them to see out the rest of their lives. 

"People should be purchasing property which has everything they need, enabling them to live longer in their own property rather than needing a care home. For example, buying a bungalow so there is less of a chance that they will fall down the stairs and injure themselves."

Baroness Cavendish added: "I have found that people often overestimate what their house is worth which can also be a major barrier to people selling and downsizing in later life."

However, there has been a shortage of small properties for retirees to downsize to.

Research from equity release adviser Responsible Life found that the downsizing dilemma is so bad that there is double the number of four bedroom properties for every two-bedroom house in 16 per cent of places. 

Steve Wilkie, managing director of Responsible Life, said: "Retirees consider downsizing to be one of the easiest ways to release some cash in retirement but many are confronted by a crippling lack of options.

"Across the country, there are significantly fewer smaller houses for sale and they are being fought over by three groups of people — downsizers, first-time buyers and those moving up the ladder.

"This lack of supply feeds into prices and unfortunately for many it’s just not worth downsizing once the cost of moving and Stamp Duty are taken into account."

At the event, Mr Green also stressed the importance of securing cross party consensus when it comes to fixing the social care funding issue saying that if this is not achieved "we will be back here in ten years time with the same problem".