Currently showing: Funding longer lives


28 May 13 12:52

It is often suggested that, in the future, older people will feel less desire to pass on their wealth to their children and more inclined to use it for personal enjoyment, to meet everyday needs or capital expenditures such as the costs of housing repairs, or to pay care costs. Currently older people appear reluctant to draw on their housing equity, which may be due to a desire to pass it on to their children. A change in attitudes could result in increased demand for equity release products.
The Joseph Rowntree Foundation, UK, published a report in which they sought to establish what is known about how, if at all, people’s attitudes towards bequeathing and inheriting wealth are changing, to establish what is known from demographic and other trends about how opportunities for bequeathing and inheriting wealth are likely to be changing, to draw out implications for financial provision for old age and to identify fruitful avenues for further research.
This report is a useful insight, though the Foundation concludes that there is not sufficient evidence to support or refute the common suggestion that older people’s desire to leave inheritances prevents them from spending their wealth on themselves.The role of inheritance, they suggest, in older people’s financial behaviour remains largely a matter of anecdote and supposition.
The report can be read here: http://www.jrf.org.uk/sites/files/jrf/1842631160.pdf
The JRF are mostly known for their research into understanding poverty but they also aim to respond positively to the opportunities and challenges of an ageing society.
There is also a further report, 'the Older People’s Inquiry into ‘That Bit of Help’' which documents the experiences of older people and professionals working together to identify gaps in service provision for older people living in their own homes.
This can be read here: http://www.jrf.org.uk/sites/files/jrf/9781859354612.pdf


Category: Funding longer lives

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Nicola Oliver - 30 May 2013, 12:53 p.m.

The findings from this study also reveal the underlying attitudes to home ownership, equity release and paying for long-term care. These are complex, and include the probably accepted culture (in the UK at least) that a family home is generally earmarked as a potential inheritance for children following the death of the parents but financial assets are seen as belonging to the individual. This ties in very well with what we understand about behavioural economics and how people categorize assets with a reluctance to move sums between categories. The idea of equity release is viewed with scepticism and suspicion, not least because the respondents in the study stated that they feared they would lose control over their asset to a financial institution and thereby lose their 'right' to make their own decisions about their financial affairs. Other fears were rooted in other factors such as their notion of dependence, dignity, a comfortable life in old age, and most significantly, a fear of indebtedness. Other work has found that attitudes towards paying for long-term care may be viewed more favourably if home-owners are assured that they had something to leave for their children.


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