Housing Minister Grant Shapps and Communities Minister Andrew Stunell have called on councils to use every opportunity under the New Deal for Older People to give elderly people more choice and control over where they live, so they are not pressured to sell their home or move into residential care.
Under the scheme the council will arrange for elderly people to move into rented accommodation, and take responsibility for maintaining and letting their property at an affordable rate. Homeowners will benefit from the rental income from their home, which will be passed back into their estate at an agreed date.
Ministers have hailed the win-win project as a future model for councils across the country - helping the elderly keep their homes while living in more comfortable accommodation, and at the same time increasing the availability of affordable family homes.
Under the New Deal for Older People the Government is providing funding for home adaptations so older people can live in their own homes for longer, and backing innovative schemes that offer elderly people the assistance they need to live independently.
Mr Shapps also confirmed allocations of an additional £20 million for Disabled Facilities Grants - bringing the total to £200 million this year. The grants enable councils to fund adaptations to peoples' homes, helping people live independently and saving them from an unnecessary stay in hospital or going into residential care.
Housing Minister Grant Shapps said: "For too long the housing needs of the elderly have been neglected. Older people who should be enjoying their homes have watched helplessly as their properties have become prisons, and many have been forced to sell their homes and move into residential care.
"With nearly a fifth of our population expected to be over 65 by 2020, radical and urgent change is needed to ensure the nation's housing needs are met. So I would urge all councils to look at the range of opportunities under our new deal for older people, which is backed with millions of pounds of Government cash, to ensure elderly people in their area get the help they deserve.
Minister Andrew Stunell said:"Too often older people struggling to live in their homes feel they have no option but to move into residential care. Giving older people more choice where they live is the right thing to do - but it also makes economic sense. Up to £26,000 can be saved each year for each person by offering an alternative to residential care.
"So I would urge all councils to help people move into suitable accommodation, or use the funding we have made available to make simple alterations so older people can stay in the home they love close to family and friends."
Read more on the Department for Communities and Local Government website