Taking out An Equity Release Plan

Taking out An Equity Release Plan

It is often the case that your retirement income will be less than the income you received when you were working. This has been the case in recent years where investment returns on pensions have been poor and the income that an annuity can provide has fallen to very low levels. Annuity providers have not been able to pay favourable rates because there have been increases in life expectancy and difficult market conditions that followed the financial crash.

Many retired people therefore find themselves in the position of not being able to work, and obtain mortgages, and having inadequate pension provision. This combination of factors has led to an increase in demand for Equity Release. If you are thinking about releasing money from your home, here are some things to consider:

Move House Instead?

Instead of taking out an equity release product, you could down-size to a smaller home and release money. This option might work out to be cheaper than taking out equity release but you will need to work out all the costs associated with moving and compare them to the costs involved with equity release. For example, you will need to pay for estate agent’s fees, solicitor’s services, stamp duty on the purchase of your new home, plus other expenses such as moving and refurbishment.

Talk To Your Family

Should shouldn’t make the decision to take out an Equity Release product by yourself. Make sure you talk to your family and other potential beneficiaries of your estate because equity release products are likely to reduce the amount of money they inherit when you die.

Talk To A Professional Equity Release Consultant

The Financial Conduct Authority regulates the provision of equity release products by ensuring that equity release consultants are fully qualified to give advice.   A consultant will be able to provide you with all the options available to you, and tell you whether or not it is the most suitable way of generating income.