Could unlocking tax-free cash be right for you?

For most of us, our homes are our most valuable asset. If you’ve owned your home for a number of years, it’s likely to have increased in value and could mean you are sitting on a chunk of equity.

Homeowners aged 55 or over, who are looking for some additional money to help them achieve their goals, have the option of unlocking tax-free cash from their home on a fixed rate of interest.

Make your retirement years more comfortable

Equity release is often used to plug a gap for people who might have a shortfall in their pension savings as they approach, or are already enjoying, their retirement.

With a lifetime mortgage, the most popular type of plan, you continue to own 100% of your home. Once you’ve repaid any existing mortgage, the money is yours to enjoy spending, and it can be taken as a lump sum or in smaller installments over time.

The amount of money that you can access is determined by the age of the youngest homeowner and the value of your property, meaning you need to be at least 55 years old to consider equity release and your property must be worth at least £70,000.

How would you use a lump sum of tax-free cash?

Research conducted by equity release broker Age Partnership also showed that repaying a standard mortgage, which is a condition of equity release, was the most popular reason to release equity in 2022. It’s important to know that advice is required before proceeding with equity release, and a qualified advisor will explore all options with you and tell you everything you need to know.

Equity release may involve a home reversion plan or a lifetime mortgage, which is secured against your property and will reduce the value of your estate and impact funding long-term care. To understand the features and risks, ask for a personalised illustration. Equity release requires paying off any existing mortgage. Any money released, plus accrued interest would be repaid upon death, or moving into long-term care.