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‘Pay when you die’ loans

Westminster announced plans for ‘pay when you die loans’ to help the elderly pay for care, without having to sell their homes.
 
What impact does this have in Scotland?
 
Lianne Lodge, associate at legal, financial and property company Pagan Osborne would be happy to help explain this.
 
Firstly, the simple answer is none, as the proposals at present only apply to England and Wales, but this is not widely understood. Scotland, too, has its own system called a charging order where the local council will put a security against the property and pay for care but this is repayable on the sale of the property rather than death.
 
But would we want a similar scheme in Scotland? 

Lianne,

who heads up Pagan Osborne’s lateryears service, said:

“The ‘pay when you die’ scheme is another option for funding elderly care and therefore good for providing added flexibility. However, it is certainly not the only answer and good news that everyone seems to be heralding.”

Lianne has concerns that these new types of loans could end up leaving the family worse off in the long term because a property left empty it will not generate any income and may potentially deteriorate. The interest, the rate of which has not been announced yet, will also roll up and will be payable on death.

“If the property was sold, the funds could be used to generate an income and there would be no interest meaning the family may be better off in the long term.

“The new scheme might work for some people and it can be good to have as an option as it will take the pressure to sell off at what can be an emotional time. The important course of action right now is to watch with interest and see if there are lessons we can learn in Scotland as we face the same issues.”

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