Equity release is a way for homeowners to raise extra cash for their retirement. It is available only to those who own their home outright and are aged 55 or over.
You can receive a lump sum or take regular or occasional income and stay in your home until you die.
The average amount of equity released is £47,323, according to Safe Home Income Plans (SHIP), the average equity release is £47,323.
The equity release cash is most commonly used for home improvements, paying off debts or going on a dream holiday.
There are two types of equity release plan — a lifetime mortgage, and a home reversion plan.
There are generally three things that make people wary of equity release (1) their reluctance to reduce an inheritance left to loved ones (2) anxiety that it could be risky, poor value or complicated; and (3) concern it may reduce entitlement to means-tested benefits.
It is the first of these that can cause real problems for families. So you MUST discuss plans with your beneficiaries.
Equity release companies are much more respectable than in the past. Make sure you choose a provider that is a member of SHIP.
Its strict code of practice guarantees no customer will be forced to leave their home or owe more than their property is worth.
Since 2004, the FSA has regulated all equity release providers and brokers — so before dealing with anyone, make sure they are on the FSA register