If you own your property outright then you may be able to fund your in-home care using an equity release scheme.

There is a lot to consider however, when looking at this type of funding option, so we highly recommend that you seek independent financial and legal advice before making any decision.

What is Equity Release?

Equity release schemes allows you use the equity or money that’s tied up in your home to pay for your care fees, while still remaining in your home. You can release the equity as a lump sum or in smaller amounts over time and the money is paid back when the property is sold.

Types of Equity Release

There are two different types of Equity Release.

Lifetime Mortgage – this is when you borrow money secured against your home. The mortgage is usually repaid from the sale of your home when you pass away or permanently move into a care home.

Home Reversion Plan – this is where you raise money by selling all or part of your home but stay in your home until you pass away or move permanently into a care home.

Who can get Equity Release?

In order to access an equity release scheme, you need to meet certain criteria.

For a Lifetime Mortgage you need to be over 55 to qualify. For a Home Reversion Plan the minimum age is 65.
The property needs to be your primary residence and located in the UK.
Your property must be over a certain value and in good condition. Some lenders may have restrictions on the types of properties they will accept.

Advantages & Disadvantages of Equity Release

Below are a few of the advantages and disadvantages of equity release schemes. We are, however, not experts in this area so you should always seek independent financial and legal advice before deciding on this type of funding for your in-home care.

Advantages

You get to stay in your own home and don’t need to move.
You get a tax-free lump sum or smaller, regular amounts of money, to help fund your care.
You continue to benefit from any rise in value of your property.
You can still move if you want to, as equity release schemes are transferrable, provided the new property meets the lenders criteria.
With a lifetime mortgage you keep ownership of your home and can continue to live there for as long as you need.

Disadvantages

It reduces the value of your estate for your beneficiaries as some of the value of your property will go to repaying the lender.
With A Home Reversion Plan, you lose either part or all of the ownership of your property to the lender.
It may affect your entitlement to means tested benefits, now and in the future.
It you get care at home funded by the local council then this may also be affected.

Further Information

If you would like to know more about Equity Release schemes then here are a few places to start:

Age UK Advice Line – 0800 678 1602
Independent Age – 0800 319 6789
Money Advice Service – 0800 138 7777