Equity release now a better option
MANY more people are now choosing to factor equity release into their financial plans for later life, rather than feeling forced to use this solution because of their situation. The product, which involves accessing a percentage of the equity in your home as a lump sum of tax-free cash, has undergone a recent resurgence. It is now a fully regulated solution available to those aged 55 or over who own their own home. As it is increasingly being offered by leading High Street banks, building societies and insurers, it’s little wonder that more than 38,000 people released equity from their homes in 2017. Low interest rates and property price increases — albeit rising more slowly now in many parts of the country than five years ago — have ensured that those releasing equity from their home are able to access more money at a lower cost. According to the Equity Release Council, people released an average of £75,000 last year, with the vast majority choosing a lifetime mortgage plan, as it means that they continue to own 100 per cent of their home. What’s more, there are no monthly payments required, as the money released, plus interest, is repaid upon death or moving into long-term care. Equity release is only available through an independent qualified adviser, so people considering this solution can be sure that they will receive a plan that is right for their individual circumstances and objectives. The adviser will also discuss the fees involved and should provide a balanced view, explaining that any money released will impact on the size of the estate and any entitlement to current or future means-tested benefits.