Equity Release Council publishes report, ‘Solving the social care funding crisis: perspectives on the contribution of property wealth’
• 60% of over-50s fearful of having to move into residential care homes
• Over one in five adults (22%) admit they did not know that many people have to pay towards the cost of social care
• Half (50%) have not thought about how to pay for future care needs, while only 12% of the over-50s have made any plans or provisions
• 4.1m people and their families have had to sell a parent or elderly relative’s home to pay for care needs
• 47% believe everyone should have access to state funded care provision with the option to top this up from their own funds
The impact of Covid-19 on Britain’s social care system has left two in three (67%) over-50s determined to stay living in their own home if they ever need care in future, according to a new report which lays bare the extent of public concern and confusion over the cost of later life care.
The report, published today by the Equity Release Council with Pure Retirement and My Care Consultant, shows the pressures of the pandemic have left a majority of UK adults concerned that care is too expensive (63%), lacking in public funds (64%) and not fit for purpose (57%).
Three in five (60%) over-50s say they are fearful of having to move into residential settings. The determination to receive care at home grows stronger with age, rising to 76% among over-70s.
The findings also show over one in five (22%) adults are unaware that many people have to contribute to social care costs in later life, rather than being free at the point of use like most NHS services.
Half of the adult population (50%) have not considered how they will pay for long-term care needs. Fewer than one in five (18%) have made any provisions for this at all.
The lack of preparedness is even more acute for older age groups: 55% of over-50s have not thought about paying for care and only 12% have put plans in place.
Millions of families compromising on care
The Equity Release Council report – Solving the social care funding crisis: perspectives on the contribution of property wealth – features insights from figures in politics, academia and financial services on the role of property wealth in supporting a broader, sustainable care funding solution.
It considers the role of public and private sectors in meeting growing demand, the benefits of later life lending product developments, and the importance of specialist financial and legal advice when dealing with a complex system and clients in potentially vulnerable situations.
Policymakers have debated a range of care funding solutions over the last decade, including caps on care costs, a social insurance fund, a National Care Service and higher taxes. Just last week the Government published its blueprint to integrate health and social care services and has pledged to bring forward proposals for broader social care reforms this year.
The Council’s research suggests nearly half of UK adults (47%) feel state funded care should be available for everyone to access, up to a certain point, with the option to top this up using their own finances. Fewer people (40%) believe care should be completely free at the point of use, while only 4% believe care should be completely self-funded.
The findings also highlight that under the current system:
- 5.5m people and their families (10.2%) have had to use their own income or savings to pay for a parent or elderly relative’s care
- 4.6m (8.6%) have had to provide care within the family due to financial pressures
- 4.1m (7.7%) people and their families have had to sell a parent or elderly relative’s home to pay for care needs
- 4.0m (7.5%) have had to compromise on low quality care for a parent or elderly relative because they could not afford any better.
Contributions to the report include:
- Finding a sustainable solution for adult social care funding – Jim Boyd, CEO of the Equity Release Council and Chair of the Council’s Long Term Care Working Group
- How can we pay for social care fairly? – Rt Hon Damian Green, MP for Ashford
- Opportunities and challenges for equity release to fund adult social care – Dr Louise Overton, University of Birmingham
- Asset rich and cash poor – could equity release bridge the gap to help fund care? Paul Carter, CEO of Pure Retirement
- Care in crisis and the need for clarity, guidance and advice – Jacqueline Berry, Managing Director of My Care Consultant
- Why independent legal advice is vital for clients in the care process – Peter Barton, Head of Equity Release at Ashfords.
David Burrowes, Chairman of the Equity Release Council, commented: “The country is crying out for a care funding plan that is fair for all and sustainable in the long-term. We welcome the Government’s commitment to progress social care reforms this year to help people live independent lives for longer. With this issue firmly back at the top of the agenda, we urge Government to bring forward solutions that can make state-funded care available to all, up to a point, with people using their own funds and assets to top this up where needed. We also need to ensure that care provision can support people’s desire to have their needs met in the sanctuary of their own homes. Property wealth can play an important role in resolving this generational crisis. The ability for people to access some of the money tied up in their homes can help realise their ambition to live there independently for longer, by funding extra homecare services, new technologies or making home adaptations.”
Paul Carter, CEO, Pure Retirement, commented: “We’re increasingly seeing a landscape where retirees are asset rich and cash poor, which could have major implications in the way that people fund their care needs in later life. It’s been great to work with people from across a number of related sectors exploring the potential relationship between later life lending and long-term care, with a view to shedding light on potential funding avenues for those needing care in the future.”
Jacqueline Berry, Managing Director, My Care Consultant added: “As we await the pledge by the government to ‘fix care’ once and for all, it’s more than likely that most will still have to pay something towards their care if they are to get the level of care they want. With residential property being the biggest asset for many, we feel this report is both important and timely.”
