AgeUK take people's homes, but abandon them if they need long-term care...

19 September 2014

old lady moneyThere’s a name for people who take valuable assets off vulnerable old people. And it’s not the one you think- national charity Age UK, have apparently been doing it for 40 years.

Most people have heard horror stories about pensioners who have been sold down the river by a greasy salesman offering some kind of equity release product that means the poor pensioner ends up owing debts, or having to sell their home. Still, these products are now regulated financial products and can, in the right circumstances, be beneficial in some situations. However, what might surprise you is a little-known service offered by Age UK that will allow you to give them your house, and in return, they will let you live in it. Sounds a great deal…

The service is called ‘gifted housing’ and has been offered by the charity (or its predecessors) since 1974. The pensioner gives their house to the charity, who then pay the council tax, water rates and buildings insurance on the property, and allow the pensioner to live in the house until they die. Other costs, classed as repairs and maintenance will also be covered, which may (or may not) include putting in wheelchair ramps or stair lifts should the need arise. The charity will also visit four times a year and offer support in claiming benefits etc, same as they do to any other older person.

Of course, the charity will only accept your home if they think that the value of the property at the date of the agreement will exceed the value of what they are going to have to pay out in costs. So far this seems a win/win kind of arrangement- for the charity- not only do they cover their costs, but they also make a turn on the capital growth. Great idea.

But what about the pensioner living in the house. Surely Age UK are then duty bound to look after that pensioner who has, essentially, given away their largest (only?) asset in the name of charitable giving.  Um, no. If you remain an independent-living kind of pensioner until your death, and you outlive Age UK’s predictions, you might come out better on the deal. However, no matter how much we might like to think it wouldn’t happen to us, if you need care, you could find yourself in serious trouble.

The “binding legal agreement”, which is completely unregulated by anyone, seems to be quite vague on the subject of care. Age UK will make “contributions to the cost” of care and support at home, and if you need residential care, they will help you find a home and again offer an unspecified “contribution”. In the detail of their 8 page guide, however, it is clear that, if you do end up needing care, it’s almost entirely your problem  “once we have notified you of our contributions to the costs of  care, you should consider how you would pay for any unfunded care costs you may have in the future.” Because infirm pensioners who have given away their only asset are in a great position to find money to fund care home fees aren't they…

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