Equity release to pay for home care

Care thrown into the spotlight 

If we didn’t know it already, the coronavirus crisis has made us realise it: carers are heroes. The pandemic has put the role of care and carers centre stage, spotlighting just how vital the service they provide is. The jobs they perform for the people they help are diverse: laundry, cooking, reporting and sorting home repairs, food shopping and night care are all examples of just a few of the ways in which home carers help on a daily basis. 

During the COVID-19 pandemic, the demand for social care has risen and to keep up with demand, many carers have been going above and beyond. In May, the BBC reported on a group of care providers who had moved in with residents after some tested positive for the virus, a true testament to their commitment to those they care for. While the Metro reported on a carer who: ‘[left] immunocompromised husband for three months so she can help with coronavirus crisis’, moving away from her family to allow her husband to shield while she continued to help her clients. 

These are just two examples of the selflessness and bravery of carers that has been brought to light during the pandemic. Cases such as these have stimulated discussions within many families about planning for the future and whether a home carer is something that you – or a loved one – could benefit from, either now, or in the near future. 

The advantages of domiciliary or home care 

There are many benefits of domiciliary or home care, with a few key ones being: 

• Enabling you to stay in the home you know and love: Houses are far more than just four walls; whether it’s memories such as bringing your first-born child home, remembering your daughter coming down the stairs in her wedding dress or your golden wedding anniversary garden party, we all have reasons for wanting to stay in the place that has been the emotional centre of our lives. Having a carer that comes to help you can allow you to stay in your home but give you – and your family – the peace of mind that you will be able to cope. 
• Independence: A home carer will help you maintain your current lifestyle, fitting in with when you like to get up, go to the shops and even taking you to your clubs, friends or your favourite pub. This can be hard to keep up in a care home, where your timetable will largely be decided. 
• Individual care: The one-on-one nature of home caring means that your carers will be able to tailor their plan especially to suit your personal needs. 
• Involvement of loved ones: When formulating your individual plan, your carers will be able to factor in the support you receive from your friends and family. 

The cost of domiciliary, home and live-in care

The Money Advice Service advises that home care will cost an average of £14,000 a year, for 14 hours of care a week. Obviously, this is just an average and depends on where you live; if you require more or less care, the fees would adjust accordingly. While there is support available to contribute to these costs depending upon your personal circumstances, as outlined by Age UK, it is likely that you will have to contribute a significant amount towards this.

If you’ve got sufficient savings, these would normally be the most sensible way of paying for any care you may need to enable you to continue living independently. But if you haven’t got enough put by, you may wonder how you will pay for the support you need to stay in the home you love. 

How equity release can help pay for care in your home 

Equity release could be a viable solution for paying for home care, depending on your personal circumstances. It enables you to release some of the equity in your property tax-free to pay for the support you need. 

There are different types of equity release schemes available, but key features include:

• Your home will still be your home – you will never be asked to leave it. 
• You don’t have to make any monthly payments.
• You can draw down the money in stages, when you need it, to keep the interest charged to a minimum. 
• Loans associated with the Equity Release Council have a ​‘no negative equity’ guarantee, meaning you and your loved ones will never owe more than the value of your house. 

The importance of expert equity release advice 

Deciding to release equity from your home to pay for care so you can carry on living in it is a big decision. It’s important to find an honest expert who will give you objective advice to help you decide if this is a good financial solution for you. 

“Our expert equity release advisers will always take time to understand your personal circumstances. We also encourage your family members to be involved in the process, so they understand what you are doing and the potential implications for them,” explained Jan Johnson, founder and director of 55Plus Equity Release. 

For many, COVID-19 has brought to light home care as a great solution for us or our loved ones. Releasing equity is one solution that could enable you to stay in your own home while affording the home care that you need to continue living independently.