Could selling my endowment help me cover care costs for my parents?

Chancellor of the Exchequer Alistair Darling announced in the pre-Budget report that under his proposals the NHS appears to be safe from significant spending cuts.

However, Age Concern and Help The Aged said that the care sector has been left wondering what the Budget means for them. Indeed, with the police, schools and the NHS all promised to be protected from cuts, the two charities claim the axe will therefore fall outside of the public sector and potentially hit care.

Chris Radford, chief executive officer of aap - the UK's biggest buyer of endowment policies - said some of its customers had decided to sell their underachieving endowments in order to raise the cash to help cover the cost of care for their elderly parents.

Concerns over care sector funding

The report by the two charities noted that 146,000 people in residential care pay all of their own costs. However, they may have needed to raise the cash beforehand to ensure they receive a high standard of services.

In 2008, there was an estimated 394,000 older people in residential care, while 450,000 older individuals have care needs, which could include having frequent visits by a private carer or nurse.

Furthermore, the average weekly fees for residential care in England stand £60 higher than the typical council payment.

Commenting on the Budget, Andrew Harrop, head of public policy at Age Concern and Help the Aged, said: "To prevent care services from getting any worse and lives being placed at risk, the Chancellor's commitment to protect health spending must be extended to social care as well as the NHS.

"Spending from the health budget should be re-prioritised to provide additional funding for the care system."

However, many Britons may decide to pay for private care or services outside of the remit of the NHS and this could require significant funding.

Selling endowment policies could cover care costs

Mr Radford, from aap, said some of its customers had decided to sell their unwanted endowment policies to ensure their mums and dads got the best care possible.

He added that should aap make an offer to purchase an endowment policy, it will always pay more than the surrender value offered by the insurance company.

Source