News and Events

Equity Release to Pay For Care

  • Posted

It is being widely reported that consideration is being given to the controversial step of forcing pensionsers to remortgage their homes to pay for personal care. The Dilnot Commission reported in July this year – see news item on ‘Long term care costs’. One of the proposals was that the value of homes could be included in the means test for for care in the home.

The report also put forward a proposal to cap the cost of care at £35,000 leaving the state to fund any additional costs. Andrew Lansley, the Health Secretary, is expected to publish a white paper next April but is planning to hold cross-party talks first. One argument will be that if people have a valuable asset and have the means to pay for care, they should be expected to do so rather than rely on the taxpayer. A counter argument is that this penalises people of modest means who have led prudent lives and built up modest capital in the value of their homes: it removes the incentive to do so and encourages others to be more financial irresponsible. That is part of a much wider and very interesting debate about means-tested benefits versus universal benefits.

Ask us about steps that can be taken to reduce exposure to assessment for care costs!