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Covid pandemic makes millions consider alternatives to care homes

13/09/2021
RETIREMENT

Research from pensions and retirement specialist LV= highlights how the Covid-19 pandemic has left millions of people considering alternative long-term care options to living in a care home.

The LV= Wealth and Wellbeing Monitor* - a quarterly survey of 4,000+ UK adults – reveals:

  • 60% (31.6m) of UK adults worry about moving into a care home after seeing how Covid-19 spread in them. The over-55s are most worried (65%) about moving into a care home.
  • Most people (61%) (32.2m) say they would rather stay in their own home and have it adapted to meet their care needs. The proportion rises to 70% among mass affluent consumers – those with assets of between £100,000 and £500,000 excluding property.
  • But one in four over-65s don’t know what they’d do if they struggled to look after themselves in later life. 

Nearly half** of UK homeowners (45%) would consider using a lifetime mortgage for at least one of a variety of reasons including:

  • Paying for home improvements for medical/ mobility reasons (17%)
  • Paying for a care worker (16%)
  • Increasing retirement income (15%)
  • Home repairs (15%)
  • Helping children and grandchildren financially (12%)

Equity release has become more popular over the past 10 years as consumers increasingly recognise how it can be used for retirement planning. Figures from the Equity Release Council shows annual lending in 2020 was worth nearly £4bn.

Figures from the LV= Wealth and Wellbeing Monitor* show: 

  • Lifetime mortgages are most likely to appeal to people with pensions  between £50,000 and £100,000
  • People who regularly see a financial adviser are more likely (58%) than the general population (33%) to consider a lifetime mortgage.

“People understand that their property and equity release can play an important part in securing the retirement they want. Many currently use equity release to top up their income, pay for home improvements or to provide financial support to family and friends but it will be interesting to see if the Covid pandemic leads to an increase in the use of equity release to pay for care. 

“LV=’s research indicates that the pandemic has made many older people reluctant to move into a care home. Rather than moving into a care home, an increasing number may consider using equity release to pay for carers and the cost of modifying their home for medical reasons.” 

Clive BoltonManaging Director of Savings and Retirement at LV=

People considering their care options should refer to the Society of Later Life Advisers (SOLLA).

LV= and equity release

LV= offers Lifetime Mortgage Lump Sum and Lifetime Mortgage Drawdown equity release plans. In 2020 LV= expanded its presence in the equity release market with the launch of a new platform supporting its products and the launch of a new drawdown product – Lifetime Mortgage Drawdown+. Using the LV= Equity Release Portal, advisers can produce key facts illustrations, submit and track lifetime mortgage applications online enabling customers to release money from their homes.

MorganAsh Care Navigator

Specialist advice service MorganAsh provides LV= customers with discounted access to Care Navigator. Led by the knowledge of experienced nurses, Care Navigator assists people arranging later-life care for a parent, loved one or themselves, with the choice of a care home or staying in their own home.

MorganAsh Care Navigator begins the process by carrying out a detailed assessment of care needs, and providing a recommendation for a care solution. There are a range of options available via the service, such as liaising directly with medical professionals and local authorities.

Notes

* LV= surveyed 4,000+ nationally representative UK adults via an online omnibus conducted by Opinium in June 2020, September 2020, December 2020, March 2021 and June  2021

** LV= surveyed 4,000 nationally representative UK adults via an online omnibus conducted by Opinium in March 2021