Elderly are ‘taking out secured loans’ to meet care fees

The economic downturn is affecting elderly people who need to pay for their care home fees, it has been suggested.

According to Saga, some people are being forced to take out secured loans against their house in order to afford the cost of care.

Usually pensioners will use the equity accumulated from their property to pay for these fees, but some are struggling to sell their homes in the current property market, long term care expert from Saga Alex Edmans stated.

“If they haven’t got other savings to meet their care home fees, they’re having to accrue a debt against their property through the local authority before they can meet their care home fees,” she said.

A quarter of the UK’s population are struggling to manage their finances, with over 3.7 million finding it hard to cope with credit card debt, a recent survey from Axa revealed.

Axa’s Steve Folkard said the credit crunch is “hitting people hard”.

By Rosie Park