The move follows the Liberal Democrat’s research into social care funding for pensioners, which looked at the level of non-housing assets held by pensioners, both single women, single men and couples. The research was done in response to the proposed Conservative Party plans for a £8k insurance payment per pensioner in order to fund their social care needs.
The Liberal Democrat research said:
• 63% of pensioner couple households (1.4m) do not have non-housing assets of £16k (the cost of insurance to cover both pensioners).
• 71% of single female pensioners (1.6m) and 64% of single male pensioners (600,000) do not have non-housing assets of £8k.
The Lib Dems say these figures, ‘undermine Conservative claims that their plans would enable older people to pass their homes to their children as two-thirds of pensioner households would have to sell or release equity from their homes to pay for the private insurance scheme’.
Peter Couch, chief operating officer at Grainger plc, the UK’s largest listed specialist residential landlord with more than 13,000 residential properties of which most are occupied by tenants aged 65-plus, commented: “The funding of pensioner social care is one of the most important issues this, or any future, Government will face. It is therefore vital that we provide a robust critique of the potential plans being considered. It is clear that many pensioners will not have up to £16k available in non-housing assets to pay for a private insurance scheme. However it may be that both the Conservatives and Liberal Democrats are right, and there is the potential for a middle-ground solution via the use of home reversion plans.”
Peter Welch, head of sales and distribution at Bridgewater Equity Release – the UK’s leading provider of regulated home reversion plans, added: “Using a worked example of a male aged 75 and a female aged 70, living in a house valued at £165k (the average UK house value), retirees could release the necessary £16k through a home reversion plan. To do so they would only need to relinquish 20% of their home to secure this amount, thereby retaining the majority equity in their home, coupled with a right to live there for life until they both have died or moved into care. Of course, in many cases this care could be provided for them in their home.”