The care home sector has been affected badly by Covid, especially after the NHS sent many Covid patients into private care homes, to try and minimise the infection across hospitals. In any event, the cost – and quality – of care is varied and unpredictable over the next two decades. That means many people on higher incomes are already thinking it could be a wise move to find a scheme that offers at-home care packages, should they be needed.
There’s more from LV= here;
Research from pensions and retirement specialist LV= highlights how the Covid-19 pandemic has left millions of people considering alternative long-term care options to living in a care home.
The LV= Wealth and Wellbeing Monitor – a quarterly survey of 4,000+ UK adults – reveals:
- 60% (31.6m) of UK adults worry about moving into a care home after seeing how Covid-19 spread in them. The over-55s are most worried (65%) about moving into a care home.
- Most people (61%) (32.2m) say they would rather stay in their own home and have it adapted to meet their care needs. The proportion rises to 70% among mass affluent consumers – those with assets of between £100,000 and £500,000 excluding property.
- But one in four over-65s don’t know what they’d do if they struggled to look after themselves in later life.
Nearly half of UK homeowners (45%) would consider using a lifetime mortgage for at least one of a variety of reasons including:
- Paying for home improvements for medical/ mobility reasons (17%)
- Paying for a care worker (16%)
- Increasing retirement income (15%)
- Home repairs (15%)
- Helping children and grandchildren financially (12%)
Equity release has become more popular over the past 10 years as consumers increasingly recognise how it can be used for retirement planning. Figures from the Equity Release Council shows annual lending in 2020 was worth nearly £4bn.
Figures from the LV= Wealth and Wellbeing Monitor show:
- Lifetime mortgages are most likely to appeal to people with pensions between £50,000 and £100,000
- People who regularly see a financial adviser are more likely (58%) than the general population (33%) to consider a lifetime mortgage.
Clive Bolton, Managing Director of Savings and Retirement at LV=, said:
“People understand that their property and equity release can play an important part in securing the retirement they want. Many currently use equity release to top up their income, pay for home improvements or to provide financial support to family and friends but it will be interesting to see if the Covid pandemic leads to an increase in the use of equity release to pay for care.
“LV=’s research indicates that the pandemic has made many older people reluctant to move into a care home. Rather than moving into a care home, an increasing number may consider using equity release to pay for carers and the cost of modifying their home for medical reasons.”
People considering their care options should refer to the Society of Later Life Advisers (SOLLA).