Equity Release Schemes and Lifetime Mortgages Offer Cash In Old Age
Pressures are rising on our millions of retired pensioners. They rely financially on their savings and investments to see them through their retirement. With each interest rate cut from the Bank of England they see their income decrease.
For those approaching retirement, its seems like that their current pension schemes will have lost large sums on the stock markets, therefore their value is much less than anticipated and pensioners need alternative sources of funds.
Financial security in retirement isn’t as certain as once thought. The escalating prices of utilies and groceries, coupled with the falling values of share based investments is making it more difficult for pensioners to meet their daily living costs. Having saved all their lives towards their pension fund, the comfortable lifestyle they were expecting is out of reach.
Equity Release Schemes can help release cash tied up in property. However they arent the solution for everyone. You may wish to consider all the information facts available and it is always strongly advised that you consult an Independent Financial Advisor before taking out an equity release mortgage.
Equity Release Mortgage providers determine the amount you can borrow via variables such are age, health and property value. There are a number of products available but most of them allow borrowing of around 35%-55%. If you are on means tested care funding or benefits check to see if your eligibility will be affected.
It’s recommended that you use a SHIP (Safe Home Income Providers) member. They can give best advice. Also look for products containing a negative equity guarantee. This means even if the value of the house drops significantly you will never owe more than your house is worth.
When considering Equity Release Mortgages make sure you are aware of all the charges involved and check for early redemption penalties should you wish to exit the product as you never know when your situation will change.
Equity Release Mortgages are regulated by the Financial Services Authority unlike the Sale and Rent back schemes which are not and often get confused.
You should always obtain independent legal advice before proceeding. Equity release can be intricate. Make sure you have all the facts at hand to ensure you make an informed decision.
Yes, Equity Release Schemes are a good idea and they can deliver but it is important that you research them fully. Find a specialist advisor who has regular dealings in this market and knows all the current facts and regulatory information.
Given the current market conditions, we would expect to see a healthy rise in the number of people incorporating equity release into their retirement planning.
Discussion Area - Leave a Comment