MP calls for equity release extension
13 March 2012
Homeowners aged between 55 and 95 may be encouraged to raise money from the value of their homes to pay for their care later in life as a result of a recommendation made by an MP.
According to Sarah Newton, MP for Truro and Falmouth, proposals made by an independent commission during a Commons debate on adult care funding should be backed by the coalition government via reform of the current social care system in the coming months.
The Conservative MP stated that ministers should raise the assets threshold at which individuals should start paying for care from £23,000 to £100,000.
She explained a lot of older people "dread" having to sell their home in order to pay for their care in their later years, reports the Western Morning News.
Equity release schemes could prove to be a viable alternative for this, as they gives individuals the chance to unlock some of the cash from the value of their property to cover care bills.
But Ms Newton - formerly a director of the charity Age UK - accepted it is likely to take "several years" until the cap is raised as per the recommendation of the committee, which may leave homeowners low on short-term options.
She added: "While I do believe that the government is starting to develop the processes that could deliver better and fairer access to services, I believe that bolder and more determined action is needed to enable more rapid change."
Plans to reform the current social care system should be revealed in the spring according to ministers, although the schedule has previously been delayed as a result of various rows.
Daniel Pearson, director at advice provider FirstStop, recently said one of the growth markets for lifetime mortgages in the coming years is set to be homeowners who need to raise money in order to pay for care in their later years.
Those interested in learning more about the benefits of such products could use the equity release calculator from Key Retirement Solutions to see if it could help their financial situation.