Is it really a good idea to downsize when you get older?
Once again the government is ‘encouraging’ elderly people to downsize and to move out of their homes – to free up housing stock for other people.
Once again the elderly are an easy target, and the word ‘encouraging’ does not sound terribly encouraging.
Elderly people and their families already come under significant pressure to comply with the health and social care authorities when it comes to care provision and care funding, and there is nothing to indicate that this kind of pressure would be any less with this new suggestion.
But why is the government instead not encouraging younger and/or wealthy people with large houses to do this? MPs perhaps? Younger people are far more physical able to tolerate moving house. It would hardly be a vote-winner though.
And so, once again the state makes a grab for elderly people’s assets, just as it does when elderly people are wrongly charged for care and are effectively forced to sell their homes.
In later life, moving to a property that is more suitable for your physical abilities is one thing, but downsizing in later life can have significant financial risks, should you subsequently need care. Here’s why:
- If you need full time care, you don’t necessarily have to go into a care home; you can choose to receive full time care at home instead. However, if you’ve already moved into smaller accommodation, there may no longer be any space for a live-in carer or nurse.
- If you find yourself being means tested for care, remember this: Your home is currently protected against being taken to pay for care if:
- your partner still lives there
- a younger relative still lives there who is incapacitated
- your former partner (divorced or estranged) still lives there and is a lone parent
- a dependant under 16 lives there
- a relative over 60 lives there (or in some circumstances a friend who has been caring for you for some time and for whom the property has become their home)
However, if you’ve already moved into smaller accommodation, it may not be possible for these people to live in your home and, when that happens, you may no longer be able to protect it.
- If you move to a smaller property and this new one is of lower value, you’re likely to free up cash in the process. If the local authority subsequently means tests you for care, that money may be up for grabs by the care authorities.
- Your son or daughter may choose to move in with you when you become frail – to provide care and to stop you having to go into a care home. Will this be feasible in a smaller property?
So consider carefully whether downsizing in later life really is a good idea. Take financial advice before you make any big decisions about your property or other assets, and make sure the adviser you speak to clearly understands how care funding works, including NHS funding.
And, remember, if you need full time care for health needs, you should be assessed for NHS Continuing Healthcare before anyone means tests you or asks you to pay for care.