LETTER : Practical preparations for Britain's ageing population

Ms Anna Coote
Friday 02 February 1996 00:02 GMT
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From Ms Anna Coote

Sir: The new Partial Equity Release Insurance scheme, proposed by the Institute for Public Policy Research as a way of paying for long-term care, need not be half as costly as Polly Toynbee suggests in "How to collect your inheritance early" (31 January).

People who purchase insurance by committing a pre-agreed proportion of their housing equity do not have to sell their homes until after their death, even if they go into residential care. A single woman aged 65 with a house worth pounds 60,000 would have to commit no more than 23.9 per cent of her equity.

Various government measures to back the scheme, which are either budget- neutral or low-cost, could reduce this to 15.8 per cent. Couples, for whom the cost is higher, could negotiate no-claims bonuses based on their commitment to care for each other without making a claim, until one dies. People whose houses are worth more than pounds 60,000 would obviously have to commit a far lower proportion. On these terms, a gamble on death striking before disability may seem less attractive.

Yours sincerely,

Anna Coote

Deputy Director

Institute for Public

Policy Research

London, WC2

31 January

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