Equity Release

Should the person who needs care be married or have a civil partner who still resides at home, funding can sometimes be a dilemma and an equity release scheme may be an option.

Whilst all the time a Spouse or Civil Partner occupies the home, Local Authorities can not take into account the value of the home in any means test, often it is the case that the spouse or partner who still lives at home will want the very best care they can get for their husband or wife /partner.

This may mean that ideally they would prefer 24 hour are at home or want a better quality home so that their partner gets the care and stimulation they deserve and that the environment is conducive to still spending quality time together rather than simply just “popping in”. In either instance this may mean that the care chosen may cost more than the Local Authority is prepared to pay, or that due to the person needing care having just more than upper capital threshold the Local Authority won’t pay . Similarly running a home on just one income may mean that any spare savings the person still living at home once had, becomes quickly eroded or the quality of care may have to be reduced. This is where Equity Release may be able to help.

Equity Release Schemes

Specialist Equity Release schemes are designed to allow you or the spouse still living at home (providing both of you are 55 plus and both of your are the homeowners to release a lump sum or income whilst you or your spouse stays living in your own home and do not require any monthly repayments. Instead, with equity release, the interest due on the loan is accumulated and loan and interest becomes repayable on your death or when you decide to sell the property or need to go into Long Term Care.

Whilst the equity released and interest accrued will reduce the amount of money your beneficiaries would otherwise receive upon your death, it will:

Enable you to afford to pay for the quality of care you would like possibly for your spouse or partner.

Help provide extra income to the spouse/partner at home, to meet household bills.

Such Equity Release schemes are becoming an increasingly popular way of raising money from your home. However, Equity Release Schemes are not suitable for everyone, and should you own the property jointly , 50% of any money released would be counted as the patients capital and may mean they loose any Local Authority funding they did have. Nevertheless depending on the level of Local Authority funding being received and the standard of care received, it may still be deemed better value by any remaining spouse or partner.Equity Release is a specialist area of business and you should therefore contact an equity release specialist in your own area. If you do not know of one and would like to find one try www.seek-er.co.uk.

“Equity release” includes both home reversion plans and lifetime mortgages. To understand the features and the risks, ask for a personalised illustration.