Getting financial advice particularly equity release

[Jim287]

My mother has unfortunately had a recent diagnosis of mild Alzheimers. As she comes to terms with this news, it's apparent to her and us that she needs to start planning financially for the future.

With that in mind we have discussed the need for her to be more financially secure than she is presently. My mother is mortgage free on her house, but has very little savings, 10k plus a sizeable credit card bill unfortunately. She wishes to stay in her house for as long as possible and she has carers that visit daily to support this. She only gets a basic state pension but is receiving attendance allowance and the higher band of pension credit.

Could others who have trodden down this path suggest how I would go about getting sound financial advice? We're really looking for advice regarding finding a financial advisor that can help us getting equity out. This appears to be the best solution given my mother's wish to remain in her house currently. I really know nothing about this, but it's fallen on me to help guide her and I want to try and make an informed a decision as possible.

Many thanks in advance

 

[Dunroamin]

Dont touch equity release schemes with a bargepole

 

[nitram]

Dont touch equity release schemes with a bargepole

Agree.
Have you considered a DPA - loan from council secured on the house usually to pay for care but can be used to fund carers at home if entry to residential care is intended.

 

[SAP]

I may not have grasped the point here but I’m not sure why you would want to do this. Your mum has too little savings to be self funding in any way so carers would be funded by the LA anyway. No one knows what’s round the corner and despite your best efforts, at some point your mum may need residential care. If and when this happens her home will need to be sold to pay for this. Until this time the LA will probably go up to 4 care visits a day. After this a PWD usually needs 24/7 care and to fund this at home is eye watering expensive, far more than residential care.

 

[Ellie2018]

I had a friend who did equity release and it was a nightmare how quickly the interest increased the size of the loan. Also would that not end up being a lump sum that would be taken into account to pay for care.

 

[nitram]

https://www.moneyhelper.org.uk/en/family-and-care/long-term-care/self-funding-your-long-term-care-your-options

 

[Jim287]

Thanks everyone for your replies, I really appreciate them.

My mother is interested in equity release as it seems the only way in which to release money. From what I've been able to find out so far, releasing equity via drawdown would limit her exposure to interest build up over time.

My mother accepts that a care home will be needed at some point in the future, but wishes to remain in her house for as long as she is able to. As it stands, her financial situation means that she is effectively losing money each month now (because of the addition of the cost the council is charging for her carers, around £700 pm) and having to dip into her savings.

Her attitude is that, because of her house, when a care home is needed she will be a self funder anyway. Therefore while she is still able to enjoy her life on her terms and her money is her own, she should be able to do so.

While I agree that equity release isn't something that should normally be sought, in some instances it must make sense? And this instance may well be one of them, given her diagnosis and personal situation.

 

[nitram]

You seem to be considering a drawdown lifetime mortgage,
Before you go this way check.
How interest rate changes with each drawdown.
Permanent residential care will probably mean early pay off, check cost of this.