Using Equity Release to Pay for Care: What You Need to Know

For many homeowners, a significant portion of wealth is tied up in property. Equity release can be one way of unlocking that value to fund visiting or live-in care at home, allowing that person to remain in familiar surroundings while receiving the support they need.

What is Equity Release?

Equity release allows homeowners in the UK aged 55 and over to access money tied up in their home without needing to move or sell.

This money can be taken as:

• A lump sum

• Smaller amounts over time (often called drawdown)

• Or a combination of both

The funds are not subject to income tax and can be used flexibly, including to pay for home care. The most common type in the UK is a lifetime mortgage, where you retain ownership of your home while borrowing against its value.

How Can Equity Release Help Fund Care?

Many people want to stay in the home they love, surrounded by memories, routines, and their local community.

Families use equity release to:

• Fund regular companionship or daily care support

• Enable someone to remain safely in their own home

• Adapt the home to better suit changing needs

• Reduce financial pressure on family members

• Allow care & support to be shaped around the person, not just the budget

Important Things to Consider

Equity release is not right for everyone. It is a financial commitment and should always be explored carefully.

Some key considerations include:

1. The cost over time

Interest is typically added to the loan, meaning the total amount owed can grow over time.

2. Impact on inheritance

Releasing equity will reduce the value of your estate and what you may wish to pass on. Talk to your family about your plans to avoid any issues later down the line.

3. Effect on means-tested support

Funds released may be treated as capital and could affect eligibility for local authority funding or other means-tested benefits.

4. Future care planning

Accessing equity now may affect options later, particularly if care needs change or increase.

5. Repayment conditions

The loan is usually repaid when the home is sold, often when moving into residential care or after death.

Common Questions Families Ask

“Will we still own the home?”

In most cases, yes. With a lifetime mortgage, you remain the homeowner.

“Do we have to make monthly payments?”

Not necessarily. Many plans do not require monthly repayments, although some allow voluntary payments if you wish to reduce interest.

“What happens if care needs increase?”

This is why planning is so important. Equity release can form part of a wider financial approach, alongside other options such as savings or investments, local authority support, insurance products and family contributions.

“Will this affect local authority funding?”

It can. Because released funds may be treated as capital, this could impact eligibility for means-tested support.

“Is it the only option?”

Not at all. Alternatives such as downsizing or, in England, deferred payment schemes through the local authority may also be worth exploring.

The Importance of Specialist Advice

Equity release should never be arranged without independent, regulated advice. Greenacre Financial Services have qualified and experienced advisers who specialise in equity release and can provide clear, personalised guidance to help you:

• Understand all available options

• Explore whether equity release is appropriate

• Put a plan in place that aligns with both financial priorities and care needs

You can find out more here: https://greenacrefs.co.uk/equity-release/