equity release

Equity release refers to a range of products letting you access the equity (cash) tied up in your home if you are over the age of 55. You can take the money you release as a lump sum or, in several smaller amounts or as a combination of both. There’s two basic types.

Lifetime mortgage where you take out a mortgage secured on your property provided it is your main residence, while retaining ownership.

You can choose to ring-fence some of the value of your property as an inheritance for your family. You can choose to make repayments or let the interest roll-up. The loan amount and any accrued interest is paid back when you die or when you move into long-term care.

Home reversion where you sell part or all of your home to a home reversion provider in return for a lump sum or regular payments. You have the right to continue living in the property until you die, rent free, but you have to agree to maintain and insure it.

You can ring-fence a percentage of your property for later use, possibly for inheritance. The percentage you retain will always remain the same regardless of the change in property values, unless you decide to take further cash releases. At the end of the plan your property is sold and the sale proceeds are shared according to the remaining proportions of ownership.

There’s a growing demand for equity release or lifetime mortgages among women over 55 who live alone and face shortages in income.

Research from the Equity Release Council’s Spring 2019 report shows single women over 55 accounted for over a quarter of new equity release agreements made in late 2018, up 50% from the previous year.

They say women will outlive their savings by over 12 years, however, women are being resourceful as they are aware that their wealth is in their property and can help them.

The growth in people, mainly women using lifetime mortgages demonstrates how equity release can fill the pension’s deficit faced by women in retirement or the loss of a partner through divorce or death.

It is believed women need £1,421 a month after tax to live comfortably in retirement, however, figures from the Department of Work and Pensions show that this is not being achieved.

On average, single female pensioners received £206 per week in 2017-18, which leaves a difference of over £500 between what women earn and what they would like to earn. To allow us to see if we can bridge that gap,

To allow us to see if we can bridge that gap, please call 0330 8080 453 or contact us.