More than one million over-60s are rethinking later-life care plans because of Covid-19
With more than a million over-60s rethinking their care plans as a result of Covid-19, Canada Life today reveals that 55 per cent still haven’t decided how they will fund it.
The research identified a growing reluctance among over-60s, to go into care homes - potentially being driven by concerns from their children. Nearly a fifth (19 per cent) of those who were previously open to care homes as an option for their family members before the crisis hit, now wouldn’t consider it. Instead, they are looking to either move into assisted living (19 per cent), or smaller and more manageable properties (19 per cent). Moving in with family members was also a popular option, with nearly one in 10 (9 per cent) looking to move into a spare room, and 6 per cent looking to move into a granny annex.
But, despite the growing need for care in later-life and the average cost estimated at GBP600-800 per week, more than half (55 per cent) still haven’t considered or don’t know how they will fund it. For those who have considered it, a fifth (21 per cent) expect to use their state pension of just GBP175.20 per week, 15 per cent expect the Government to pay for it, and a further 15 per cent expect to use their cash savings.
Just 5 per cent of over-60s plan to use equity release to cover the cost of care. But with property wealth in Great Britain estimated to be worth over GBP5 trillion, equity release could allow those in and approaching retirement to unlock the wealth stored in their homes to help with care costs; on average people are releasing GBP102,443 as a lump sum. However, the research shows that there is still a knowledge gap when it comes to later-life lending products, with 8 per cent of over-60s unsure of what equity release is and how it can be used to meet their care needs.
Alice Watson, Head of Marketing, Insurance, Canada Life, says: “With people living longer lives and retirement now lasting up to several decades, the reality is that the majority of us will have to pay for later-life care at some stage - whether that be for ourselves or loved ones. This pandemic has changed the way we’re thinking about our futures and how we want to spend them, and ultimately, it’s the industry’s responsibility to ensure advisers have the tools to engage with their clients effectively, offering them the most suitable solutions. It’s about getting people to think about their wants and needs in the different stages of retirement and kick starting these conversations early on - no matter how difficult they might be - and this is where advisers have a significant role to play.
“As an industry, it’s important we highlight how equity release can be used to meet the needs of an ageing population, by allowing people to age in their homes, while accessing cash to fund residential care solutions for themselves or family members. There are a growing number of flexible solutions available to help customers who are looking to unlock equity from their homes and advisers are well placed to help them find the best suited product for their unique circumstances.”