Equity release ‘a solution for long-term care costs’
Homeowners aged between 55 and 95 who are not sure how they are going to cover the cost of their care later in life may be able to turn to their homes for a bit of extra money.
According to Financial Conduct Authority head Martin Wheatley, equity release plans are going to have a role to play in the finances of older people in the years to come.
The FCA is set to take over some of the powers and responsibilities of the Financial Services Authority later in the year and Mr Wheatley made the prediction at an Age UK conference in London last week.
A report by Money Marketing said the executive suggested equity release schemes could prove to be "part of the solution" to paying for long-term care in the future.
He argued there is a "huge amount" of capital tied up in homes at the present time that homeowners could access in order to pay for care in their retirement.
"We may have moved beyond the age of leaving a home intact and debt-free to the next generation. The challenge now is how people can utilise the value that has been built up to pay for what is becoming an increasing problem of caring for an ever-longer old age," Mr Wheatley told the gathered delegates at the conference.
Association of British Insurers director general Otto Thoresen added that there is a need to think about how the profile of lifetime mortgages can be made more positive in the coming months.
Equity release was one of the areas covered by the care funding report outlined by Andrew Dilnot last July, with the industry set to play a major role in how older people pay for their care.
Sarah Newton, MP for Truro and Falmouth, recently said a lot of homeowners "dread" having to sell their property and equity release schemes could be a solution to this problem in the future, the Western Morning news reported.
Posted by Claire Ford
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