Making Use of Equity Release

Making Use of Equity Release

Equity Release is a solution that is increasingly used by older people in the UK to provide them with money in their retirement. Different plans provide different methods of releasing money, and you have the option of taking the money as a cash lump sum or as income.

The reason why equity release UK is becoming so popular is that many people in retirement find that they live in a house that is worth a considerable amount of money and they wish to use this. These houses often have no outstanding mortgage. Their reasons for using money in their houses range from buying a new car or funding their travel whilst they are still physically fit, to paying off a loan or treating their children and grandchildren – and taking pleasure from the enjoyment they bring. There are numerous other purposes too.

Advantage of Equity Release

The key advantage of equity release is that it enables home-owners to tap in to the value of their property without any need to sell it or move out. This is an important issue for many elderly people who have lived in their homes for many years and have no desire to move out.

However, there are two issues that require careful consideration when taking out an equity release scheme:

  1. The impact that the money will have on means-tested state benefits you currently have.
  2. The effect on your estate of removing money from the home. This will result in a lower sum – or nothing at all – being passed on to your beneficiaries.