Council staff have proved reluctant to signpost older clients to equity release schemes to fund low-level support at home, research has found.
Just 20 people enquired into taking out an equity release loan over an 18-month pilot in which three local authorities agreed to signpost suitable clients to a financial adviser to recommend whether the product was suitable.
The Joseph Rowntree Foundation pilot, from January 2010 to June 2011, was designed to enable older homeowners on low incomes to take out a loan against the value of their home to fund support with shopping or gardening that they would otherwise be unable to afford.
The product, the Home Care Plan delivered by Just Retirement, was designed to enable clients to draw down limited sums at a time to protect their entitlement to means-tested pension credit, unlike many other equity release products, which require larger withdrawals.
However, not only did only 20 people come forward, but most of these wanted to use the loan to fund work to the property or to pay down debt, in line with the equity release market more generally, not to fund low-level support.
The three pilot councils – Islington, Kensington and Chelsea and Maidstone – found a deep-seated perception that equity release products were risky among potential clients, despite the extensive consumer protection now in place, found the evaluation, published today by the JRF.
However, scepticism about equity release of frontline staff at the pilot councils was a key barrier to take-up.
“Following training about what was on offer in the pilot schemes, the views of most [staff] shifted from scepticism about equity release to agreement that it could be appropriate for some people,” the report said. “But in many cases, opinions drifted back to the sceptical, and countering this change required repeated briefings about the schemes.”
Report author Richard Gibson said this reflected the fact that staff, who came from social services, housing and other departments, had little contact with the target client group and so did not have their training reinforced and lost confidence in their knowledge.
By contrast, 1200 people enquired after the Home Care Plan in the nine months after it was launched nationally in November 2010, with signposting provided by Age UK and care advice body FirstStop.
“Age UK staff are more used to signposting people to other bodies, including commercial bodies, and have more contact with the people who could benefit,” said Gibson, a former civil servant who specialised in local government finance. “Perhaps the local authority isn’t the best way [of providing this signposting service].”
However, he said there was no evidence as yet as to whether more people were using the Home Care Plan to fund support in the home since its national launch.
The JRF report said its findings raised issues for the government’s plans to reform care funding, which will be set out in a White Paper this spring, should this result in greater expectations be placed on council staff to alert people to financial products to enable them to fund their own care.
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