I helped Alice do just that...
If you thought leaving home at 19 was hard, try it at 97. Helping people live where they love for longer is one of the many benefits of equity release, says financial adviser Joanne Brown.
At a recent Society of Later Life Advisers (SOLLA) event in London, I was involved in a discussion about equity release.
We were debating why this product continues to get such a bad rap, when, from my own experience of advising on the product, it can bring such benefits to customers.
To challenge this perception, I wanted to share one of my own stories with the wider adviser community. That’s why I’ve written this piece for Aviva…
Alice was 97 years old when we first met, and lived at home on her own. She had never married and didn’t have children.
Having reached such a grand age, Alice was resolute that she wanted to stay in her home for the rest of her life. After all, it was where she felt comfortable and secure, and where she had many happy memories. The idea of moving to a care home frightened her – her independence mattered just as much at 97 as it had at 19.
At the time, Alice was receiving private in-home care for a few hours per day. But her needs had recently been reviewed by her care provider and the cost of her care was about to go up significantly.
As a result, her hopes of staying in the home she loved were in jeopardy.
Equity released help to pay for care
As a SOLLA-accredited adviser, I’m well aware of the challenges and financial considerations that people in later life often experience.
So, after being approached by her attorney to help, I advised Alice and her attorney on the various ways of paying for care.
Alice’s financial circumstances meant she’d be classed as a ‘self-funder’, because her assets outside her property exceeded the Local Authority’s thresholds. But while she had a certain amount of money, the uncertainty of how long this money would last – and what would happen if it ran out – was a real fear.
That’s why, after our meetings and having conducted a full financial review, I recommended that Alice release some equity from her home in order to buy an immediate care annuity.
This annuity met the costs of Alice’s care, and was paid directly to her care provider each month.
Alice's care needs increase again
This arrangement continued for about 6 months. But then Alice’s health took a turn for the worse and she needed 24 hour live-in care.
Thankfully, we’d planned for such an eventuality.
When we’d set up the lifetime mortgage, Alice didn’t use the full maximum loan-to-value available. So we’d set up a drawdown facility in case of a situation like this, where additional funds were needed.
We released the remaining ‘drawdown’ funds via the existing lifetime mortgage and purchased a second immediate care annuity to contribute to the costs of Alice’s care for the rest of her lifetime.
Still in the home she loves
Using equity release enabled Alice to pay for her care costs without fear of the money running out. And, more importantly for her, without being subject to Local Authority involvement – which could have resulted in her moving into a care home.
As I write, Alice continues to be able to live in her own home. In the environment where she’s happiest, with the appropriate level of care and support. Her care costs will continue to be met for her lifetime, and she has sufficient funds remaining to meet any unforeseen changes in the future.
And, I don’t know about you, but personally I think that’s fantastic. Because whether you’re 19 or 97, living in the place you feel safe and comfortable is hugely important.
- Joanne Brown is the Director of Later Life Matters
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