Releasing Equity for Care. Advice needed.

[SlackPanther]

Hello. My parents are very elderly and frail, one is in early stages of Alzheimer’s, but doing well considering, the other had a stroke a few years ago, but is just about managing.

They have a house, but no cash. A small annuity, state pension and Attendance Allowance which they use for someone to come in and help them dress and shower.

We will soon need to get lots more help.

Does anyone have experience of releasing equity to pay for care? Is there a good company? How much does it cost to set up? Do you have to draw down a big lump sum, or can you draw it down as you need it?

I am clueless. Who should I talk to? (I have power of attorney).

Is there a better way to get care for them?

Anyone got any experience? TIA!

I'm a financial adviser and I hold the appropriate Long Term Care qualifications, including Equity Release, but I'm not currently active in this area as I have too many pension enquiries!

I strongly recommend that you look for an adviser who is a member of SOLLA, the Society of Later Life Advisers, and preferably one who is not a representative of St James Place (because an IFA will generally be less expensive than SJP). Google "solla". The website has a directory of advisers so find one local to you.

Have you asked your local authority to carry out a care needs assessment for each of your parents? This is a starting point for determining whether you may be able to get any assistance from the local authority. They will also carry out a financial assessment to determine whether your parents would qualify for any council-funded care, but it sounds as though they have assets and income above the qualifying thresholds.

Your council may be able to offer an alternative to the equity release route in that they may be willing to allow care costs to be accrued against the property, so they will be paid eventually, either after the second parent dies if they continue to live in their own home or if the house is sold and they've moved into residential care, etc.

There is a product called drawdown equity release where you take a lump sum to start with and can then release further amounts when you need to. I work for an IFA who advises on it. Definitely check all the pros and cons before signing anything, including what means tested benefits could be lost if they suddenly get a lump sum of cash.

Could they buy into a sheltered housing bungalow/flat?

Thank you all very much for these suggestions and observations.

Clearly a lot to think about.

We are looking at downsizing, too, but we could put them through all that and then one of them goes, or becomes really too incapacitated and needs more care. They are in the second half of their 80s.

The value of their property would not be considered for domestic care, only residential care so worth keeping that in mind.