FCA to help pensioners unlock the value of their homes
The Financial Conduct Authority (FCA) is to examine problems facing Britain’s ageing population, many of whom are asset rich but cash poor, by looking at increasing competition in the equity release market amid concerns that not enough people are taking advantage of unlocking the value of their homes...It is widely known that the costs of Care in later life can be significant, however far less known are the range of options available to people when it comes to funding long term care. These may be of particular interest to people who are “cash poor” or concerned about funding Care through immediate cash or savings.
For people who own their own homes, one of these options involves taking out a loan secured against their property. The interest rates are fair and gives them immediate access to cash with which to fund their Care; the loan and interest are then rolled up into a single debt to be paid out of their estate. This was the subject of a recent feature in The Times newspaper, though the full text is transcribed below.
To address what is often referred to as the “care funding gap” - the difference between the level of Care someone needs and what they can realistically afford - Bluebird Care has partnered up with Care Planning Services, a coming together of two professional firms: Money Wise Independent Financial Advisers and Stone King Solicitors, who have a strong reputation, as later life experts, for the quality of services they provide to people wishing to make decisions about their long-term care. Stone King's solicitors are members of the Solicitors for the Elderly and Money Wise’s advisers hold the Society of Later Life Adviser’s accreditation.
Care Planning Services offer our customers access, if required, to the specialist legal and financial advice they may need to secure the level of Care that they or their relatives need on a sustainable and ongoing basis.
The FCA is the Financial Conduct Authority which regulates the whole financial services community.
Full text from The Times article:
“The FCA is to examine problems facing Britain’s ageing population, many of whom are asset rich but cash poor, by looking at increasing competition in the equity release market amid concerns that not enough people are taking advantage of unlocking the value of their homes.
“The average pension pot is £30,000, yet a significant number own property assets of around seven times that number or more,” Christopher Woolard, Director of Strategy and Competition, said at a mortgage conference held by the FCA yesterday [07 September, 2015].
“The ability to access some of that asset, as a restricted lump sum or as a gradual income, could make a significant difference to people’s lives.” Mr Woolard confirmed that the FCA would be undertaking research that would include a review on key aspects of the implementation of the Mortgage Market Review and would take a particularly close look at curbing risky lending.
“No one wants a return to the unaffordable lending practices of the past, where almost every application was approved. And this is likely to mean [among other things] that assessments of mortgage applicants’ circumstances will continue to require more care than they did pre-crisis,” he said.
“We do, however, have to remain sensitive to the impact of these reforms over the long run.”