Policy chief suggests that elderly should sell homes to fund care
Theresa May’s policy chief has suggested that people with valuable homes who face high social care costs in old age should sell homes to fund care or re-mortgage to cover their bills.
The information, obtained by the Observer, has found that director of policy John Godfrey has suggested that over the next 10 years the solution to the social care crisis lies in people selling up or releasing some of the equity in their property.
“On a 10-year view … equity release is going to be hugely important, because if you look at the amount of housing equity across the UK that is owned by people of post-retirement age, that is really where an awful lot of the money sits at the moment,” Godfrey told an independent commission last year. “Can people either downshift or liberate some of that money through equity release to fund their living costs?”
The facts surrounding this indicate that 1 in 10 people end up paying more than £100,000 in care costs in old age. Equity release involves borrowing against the value of a home or selling all or part of it for a lump sum or a monthly income.
Godfrey, who was a special adviser to Douglas Hurd in Margaret Thatcher’s administration, added that he believed the government should encourage people to sell their homes to release cash through the building of suitable retirement homes.
“As far as downshifting is concerned, you move into another area of policy altogether, which is the need to build more housing to give people a choice of the right sort of home.”
Godfrey had been working for insurer Legal & General as corporate affairs director for eight years before his appointment in mid-July. His comments will be controversial, given that they involve the suggestion that people should spend their children’s inheritance – in the form of the family home – to cover the costs of social care.
It should be pointed out that in 2013, then health secretary Jeremy Hunt said it was a scandal that every year “30,000 to 40,000 people are having to sell their houses to pay for care costs”.