Retirement is viewed as a time to relax, slowdown from work and embark onto newer things. It should be a restful, productive and most of all an enjoyable point in life. What shouldn’t be included are concerns regarding money – especially important things such as care. As humans age, we may need help with certain aspects of our life, including our own health and well-being. Yet the cost of health is becoming such a worry, that pensioners are remortgaging their homes to cope with rapidly increasing care costs.
With the rate of inflation rapidly growing, the cost of care is growing with it. A pension may be able to cover for the price of carers visiting multiple times per day, but it fails to extend to general support in life. For example; home improvements to make living easier or simply supporting the family is made much more difficult by the cost of care.
As a result, pensioners are choosing to take out an Equity Release Plan. It is a better solution compared to the option of selling altogether. There is still the ability to keep the precious, long-standing family home whilst retaining some profit. In addition to this, there is also the possibility of borrowing more if further funding is needed. The only issue that can arise is that interest rates can pile up and the final total to pay following the death of the borrower can be substantial. However, it gives some peace of mind in the face of unattainable care costs.
At present, the average cost of a residential care home has gone beyond £80,000 per year. The government has been called on to address the issue. There was hope that a solution would be outlined in the Autumn 2017 Budget, however there were no major announcements.
Equity Release is a good option for pensioners who are struggling with their finances. It enables them to tap into the value of their homes but without having to give up something of great, sentimental value. However, the cost of care needs to be addressed. Pensioners shouldn’t have to struggle obtaining something that they fundamentally require. The government needs to act now, and should’ve made some provision in the last budget, sadly this was not the case.
