The discussion about equity release is hotting up !  ( see earlier posts on this subject by clicking on equity release in the tag cloud )

A report by property agent Rightmove, based on a consumer survey, has indicated that over 40% of people recently selling houses are down-sizing.  They put this down to the Baby Boomer generation who are cashing in some of the equity in their now overly large family houses.  This is a phenomenon that started in the USA over 30 years ago as ” empty nesters ” began to fly south to Florida.   It has also happened to a smaller degree in the UK, with people moving to Devon and Cornwall to be closer to the sun.   The more adventurous upped sticks and moved to Spain.

 Many of the early movers were recently retired and still in their sixties or early seventies, probably most were living with a spouse.   They were seeking to buy themselves  a new life.   Who is to say they were wrong ?  —  a warmer climate and mortgage free, relatively inexpensive living.   What they were not doing was thinking too far ahead.   They did not expect to live for another twenty years, nor could they know if ill-health would befall them.   Most of all they wanted to enjoy life for as long as they could.   In most cases they will have succeeded !

It is only for the unlucky few, that  frailty does catch up.   Only then do you realise that you may have burned your bridges, moved away from supportive relatives and used up most of your assets.   Your options then are suddenly very limited  —  either struggle along at home alone or literally fall back on the state.   Neither outlook  is very good.

  The missing ingredient which was not available twenty years ago and  is still not today, thanks to Government procrastination, is sensibly priced long-term care insurance.    This is precisely the issue that the Dilnot commission was trying to resolve.  While their financial formula may not be economically affordable to the Government, the principles of Andrew Dilnot’s report are essentially correct.

            But is it fun in the sun for one ?