Equity Release

Can equity release help older generations provide the gift of home ownership to their loved ones?

How to release tax-free cash from your home

It’s that time of year when, for many, thoughts turn either to sprucing up their home for spring or making the leap and starting fresh in a new one.

For many first time buyers their hopes of stepping onto the property ladder often fall at the first hurdle, with the inability to raise a deposit. Research from Just states that 61% of first time buyers are helped on to the property ladder by their parents or grandparents, but how are these older generations finding the funds?

Equity release could provide the solution

One of the most popular reasons people are releasing equity is to provide a gift for a loved one, according to data from the UK's largest equity release broker, Age Partnership.

In 2014, more than 5% of people that released tax-free money from their homes did so to provide a gift for the loved ones. In 2019, this figure had risen significantly to over 12%, with family using these gifts for deposits for homes and university fees, among others1.

Get your FREE guide to find out if equity release is for you

In order to release equity, the youngest homeowner must be at least 55 years old and your home must be worth at least £70,000.

With a lifetime mortgage, the most common type of equity release, you could release from £10,000 up to 55% of the property value which is paid to you tax free.

An independent equity release advisor will explore all of your options with you, and will tell you everything you need to know about equity release, including the effect on the amount of inheritance you can leave and if your entitlement to means-tested benefits could be affected now or in the future.

What’s involved?

Equity release may involve a home reversion plan or lifetime mortgage which

is secured against your property. To understand the features and risks, ask for a personalised illustration.

There are no monthly repayments required with equity release, any money released, plus accrued interest, would be repaid upon death or moving into long-term care.

Once you’ve paid off any existing mortgage that you may have, the tax-free money that you release is yours to spend as you wish.