Equity-release specialists have called on providers to develop products for the home care market which allow customers to draw down smaller amounts.
A drawdown scheme is a type of lifetime mortgage where customers can release chunks of the maximum amount a provider has agreed to lend instead of receiving the full amount at the outset. Providers will typically release a minimum of £10,000 at a time.
EquityCare chief executive Tim Eadon (pictured) is calling on providers to launch schemes that allow people to release smaller amounts to fund home care.
He says: “It is great talking about equity release with the domiciliary care market but if you have not got a product that works in that market, it is not helpful.
“The problem is the lowest loan anyone will give is £10,000. For the domiciliary care market, that is way more than people need to start with, so we need a product that will let homeowners release smaller amounts.”
Independent Equity Release Advisers Alliance spokesman and IFA Dermot Brannigan says: “It can be expensive to draw down £10,000 at a time. Being able to release a smaller, regular amount of money would probably be a good idea when people get to retirement.”