Retirement Income  

Rise in over-55s weighing property wealth for care funding

Rise in over-55s weighing property wealth for care funding

Over-55s are increasingly looking at property wealth to fund care, according to equity release adviser Key.

In a March survey of 1,000 adults aged 55 plus, three in 10 (29 per cent) identified property wealth as a source of care funding, up 10 percentage points from 2019.

Meanwhile, the proportion of over-55s looking to savings and investments, and pension income as sources of care funding both fell by the same amount year-on-year, as Key cited a “combination of low interest rates and continuing stock market volatility” as the reason.

But the research also found that a quarter of over-55s said they did not know how they would meet the cost of care (15 per cent) or simply would not be able to meet the costs (10 per cent).

The advice firm found a growing concern among over-55s about how to fund social care, with 35 per cent saying they were worried, up from 21 per cent last year.

Despite concern, only one in five surveyed had made some financial provision to pay for care if they need it. A mere six per cent felt they were wealthy enough to meet any care costs, down by half (13 per cent) from last year.

Will Hale, CEO at Key, said: “With the recent economic turmoil, confidence in savings and pension income has fallen while more people are looking to the value tied up in bricks and mortar to finance care.

“Today’s figures suggest that between 2017/18 and 2018/19, we have seen a 10 per cent fall in the number of people who councils are providing full or partial care funding for but this may only be part of the picture.

"Indeed, we know that councils are working hard to support local residents who need care but are facing tough financial challenges and may need to make difficult choices."

Freedom of Information requests submitted to councils in England, Scotland and Wales by the advice firm showed a drop of up to 10 per cent year-on-year in the number of people receiving some form of financial support for care, from 568,867 in 2017/18 to 512,916 in 2018/19.

In a speech last month (June 30), prime minister Boris Johnson said he would not wait to fix issues in the social care system that “every government has flunked for the last 30 years” and that the government was finalising plans.

Subsequently, the Independent Care Group called on the government to set an urgent timetable for social care reform, arguing that the situation had become “dire” amid the coronavirus.

Mr Hale said: "It is vital that the government focuses on setting out clear plans for reaching a cross-party consensus on social care, and consider long-term reform and funding of the care system.”

Commenting on the care report, Jacqueline Berry, founder of My Care Consultant, said: “Too few people consider how they will pay for care and when they do reach a stage in life when they need additional support, they look for local government help and are often disappointed as they are not eligible due to their finances or because they only need relatively low level support.