Can We Release Equity from Our Home to Cover Care Costs in Our 70s?

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Understanding Equity Release and Care Fee Protections

For couples in their early 70s, concerns about financial security and future care costs are common. Many have a significant portion of their wealth tied up in their home, which can lead to anxiety about what happens if one partner requires long-term care. This is particularly true for those with a mortgage still outstanding and limited savings.

In England, the care fee system offers some protection for couples where one partner moves into a care home while the other continues to live in the family home. The property is not counted as an asset in the financial assessment, regardless of whether it is owned jointly or by one person. As long as the remaining spouse lives in the home as their main residence, the local authority cannot force a sale or place a charge on the property.

This means that if, for example, one partner goes into residential care, only their income and personal assets are considered for care fees. The value of the £350,000 house would not be taken into account. However, this protection only applies while one partner is in care. If both require care or if the surviving partner passes away, the property may then be considered in the financial assessment.

Even in these situations, there is no immediate or forced sale. Local authorities typically offer a deferred payment agreement, allowing care fees to be paid on your behalf while a legal charge is placed on the property. The debt is recovered when the home is eventually sold, providing families with time and flexibility during difficult periods.

Equity Release Options

Equity release is often discussed in relation to these concerns, but it should be approached carefully. It is possible to release equity from your home while both partners are still alive and well, but local authorities have rules regarding asset deprivation. If someone gives away or spends money with the intent of avoiding care fees, the authority may still consider it as part of their assets.

However, the key factor is intent. Releasing equity to fund travel, improve quality of life, or enjoy retirement while fit and healthy is generally seen as different from doing so when care needs are clearly foreseeable. In practice, a couple in their late 60s or early 70s taking a reasonable amount of money for retirement purposes is unlikely to be accused of trying to avoid care costs, especially if there’s no immediate expectation of needing care.

It's important to understand that equity release is not free money. Lifetime mortgages, for instance, charge interest that accumulates over time, increasing the debt the longer it remains unpaid. Taking a large lump sum early can be expensive, but many modern plans allow for smaller withdrawals over time, helping to limit interest accumulation.

Before considering equity release, it may make sense to clear the remaining £8,000 mortgage. This can reduce overall costs and provide more financial flexibility.

Balancing Security and Enjoyment

Ultimately, the decision to release equity should be based on a balance between security and enjoyment. The care system already includes protections to prevent one partner from being made homeless if the other needs care. Equity release can be a useful tool in later-life planning, but it should be used deliberately and for the right reasons—such as improving quality of life—rather than out of fear of potential future events.

Consulting a regulated adviser can help explore different scenarios and ensure that any decision aligns with both lifestyle goals and long-term needs. This approach allows for informed choices that support financial stability while also enabling a fulfilling retirement.