For many people, the priority in later life is to remain in their own home for as long as possible. When health or mobility begins to change, paid care at home can make that a reality - but it comes at a cost that is not always easy to meet from pension income alone. Equity release is one of the ways people fund care at home, and for those with significant property wealth it can be a practical solution.

This guide explains how equity release can be used to pay for care at home, what the advantages and limitations are, and what to think about before making any decisions.

What does care at home typically cost?

Home care costs vary depending on the level of support needed and where you live. For relatively straightforward support - help with personal care, meal preparation, and household tasks - costs can range from around £15 to £25 per hour depending on the provider and region. For more intensive or specialist care, including live-in care, costs can be considerably higher, running to several hundred pounds per day in some cases.

These are ongoing costs rather than one-off expenses, which means the funding question is not just about how much you can release today - it is about whether you can sustain the cost of care over months or years.

How can equity release help?

Equity release allows you to unlock money tied up in your home without needing to sell it or move out. The two main options are a lump sum lifetime mortgage, which releases a single amount that can be used to fund care over a period of time, and a drawdown lifetime mortgage, which gives you access to a reserve of funds you can draw on in smaller amounts as and when you need them.

For care costs, a drawdown arrangement is often the more practical choice. Rather than releasing a large lump sum and holding it as savings - which could affect means-tested benefit entitlement - a drawdown plan allows you to take money as care costs arise. Interest only accrues on the amount actually drawn, which helps to manage the long-term growth of the loan.

Can equity release be used alongside state funding for care?

This depends on your financial position. Local authority funding for care is means-tested, and your home is taken into account as an asset when you are assessed - unless a qualifying person such as a spouse, partner, or dependent relative continues to live there. If you are funding your own care, equity release can help bridge the gap between what state support covers and what your care actually costs.

It is important to get a proper care needs assessment from your local authority before committing to any funding arrangement. Understanding what you may be entitled to in terms of state support - including Attendance Allowance, which is not means-tested - is an important first step.

What home adaptations can equity release also fund?

Many people who use equity release to fund care also use part of the money to adapt their home at the same time. Adaptations such as stairlifts, walk-in showers, grab rails, wheelchair ramps, and ground-floor extensions can significantly reduce the level of paid care needed and help you remain at home for longer.

Funding both care and adaptations from the same equity release plan can be a cost-effective approach, and it is worth thinking about both together rather than separately.

What are the risks and limitations?

Equity release is not a short-term solution, and it is important to think carefully before using it to fund ongoing care costs.

Interest compounds over time, so the longer the plan runs, the larger the outstanding balance becomes. If care needs increase significantly and you eventually need to move into a residential care home, the lifetime mortgage would typically be repaid at that point from the sale of your property. Understanding how the balance is likely to grow - and what that means for the eventual estate - is an important part of the advice process.

If you are already receiving means-tested benefits, releasing a lump sum could affect your entitlement. As noted above, a drawdown arrangement can help manage this, but it is worth getting specific advice on your benefits position before proceeding.

It is also worth considering whether other options - such as Attendance Allowance, local authority support, or a combination of savings and equity release - might reduce the amount you need to release.

Is equity release the right way to fund care at home?

It can be, but it is not the only option and it will not be right for everyone. The decision depends on your care needs, your financial position, your benefit entitlements, and what you want to leave behind for your family. A qualified adviser will look at all of these factors and help you understand whether equity release is the most appropriate route.

How Aspect Mortgages can help

Aspect Mortgages is a member of the Equity Release Council, and Richard, Rachel, and Neil are each individually registered members and qualified to advise on equity release. Richard holds the Advanced Certificate in Mortgage Advice and Practice (Adv CeMAP) and the Certificate in Regulated Equity Release (CeRER). Rachel holds the Certificate in Mortgage Advice and Practice (CeMAP) and CeRER. Neil holds the Certificate for Financial Advisers (CertPFS) and the Certificate in Mortgage Advice (CertCII(MP)).

If you or a family member are thinking about using equity release to fund care at home, call us on 01257 812345 or visit our equity release page. We offer appointments in your own home, by video call, or at our Chorley office - whichever suits you best.