Could equity release be the answer to your retirement wishes?
Most of us have a bucket list of things we would like to do when we retire, whether that's going on a once-in-a lifetime holiday, making major home improvements, or buying a dream car. The only thing standing in our way is the fact that completing a bucket list isn't cheap, and when we are on a restricted income, it's not always possible to chase our retirement dreams.
For some people, the sensible financial approach is to re-think our dreams, but in other cases, over 55s could consider releasing some of the equity in their homes to free up the cash for their bucket list.
Those with significant equity tied up in a property, but who do not want to downsize, can consider taking out lifetime mortgage, a popular equity release plan, to borrow money against the value of their home.
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The specialists at Age Partnership say they've helped a number of people realise their dreams. They say that 19% of their customers chose to make home improvements or go on holiday. Mr Mason, a homeowner from Derbyshire, wanted to pay off his standard mortgage, do some home improvements, travel, and on top of that provide some money for his children.
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Another popular item on the list is debt repayment (1). Some 13% of customers chose to pay outstanding debts through equity release. They highlight Mr and Mrs French, who needed to pay off some debts, and Mrs Nunn, a widow from Devon was looking for funds to pay off her existing mortgage. In fact, Age Partnership found that 34% of customers who released money from their home last year, used the money to pay off their standard mortgage – freeing them from monthly repayments.
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Seek expert advice
Equity release is not right for everyone and not every equity release policy is the same either, so anyone considering releasing the cash locked up in their home should seek independent, impartial advice to ensure that it is the best option for them. With a lifetime mortgage, the most popular equity release involves borrowing money against the value of your home, and interest is rolled up and repaid when you move into a home or pass away.
Age Partnership's qualified advisors compare the whole of the market and only recommend a plan if it's in your best interests. They can discuss all the options with you, including what impact it could on the size of your estate over time, the amount of inheritance that can be left behind and if your entitlement to means-tested benefits could be affected now or in the future.
To find out more about equity release including how much money you could release from your home, visit agepartnership.co.uk
Equity release may involve a lifetime mortgage or home reversion plan. To understand the features and risks, ask for a personalised illustration.
Age Partnership will provide initial advice for free and without obligation. Only if you choose to proceed and your case completes would a typical fee of 1.85% of the amount released be payable.
(1) Think carefully before securing debts against your home. By extending the term of these debts, you will be increasing the overall cost.
