A recent survey by Saga has highlighted the increasing financial burdens faced by the over-50s which are forcing them to make serious spending cutbacks. More than 60% said the quality of their lifestyle has ‘crashed’ during the past 12 months. They are not living ‘on the breadline’ says the report, but having to watch their non-essential spending by cutting back on things like holidays and using the car, as well as reducing leisure related treats.
15%, however, are reducing ‘essential’ spending, like heating their home; a worrying thought for those with older relatives?
Equity Release as a Pension Top-up
Up until a few years ago, the most popular use of equity release was funding home improvements. Next up, mortgage and debt repayment took over as interest rates plummeted. More recently, supplementing a pension accounts for most plans taken out and this is surely due to the rising costs of living and the drop in projected pension income.
Traditionally, those taking out an equity release plan to use as a pension top-up have been encouraged to keep the amount released at the outset to a minimum in order to reduce long term costs and protect any means-tested allowances. Draw down Lifetime Mortgages and staged payment Home Reversion Plans have therefore become very popular.
Not Every Plan Guarantees a Drawdown Facility
However, it is little known by those outside the equity release industry that not every plan carries with it a future cash-release guarantee. Clauses can allow providers of Lifetime Mortgages to remove a drawdown facility without notice and with Home Reversion Plans, a top-up guarantee is not always included in the offer.
It is crucial, therefore, that clients considering equity release with a specific need or desire for a top-up facility, are advised by a specialist who can recommend a plan with that does carry the appropriate guarantees so that they can be certain of their income in retirement.
At Bower, we ensure that all plans recommended to our clients are properly fit for purpose. There are plans that carry the relevant guarantees, and we’ll know which ones they are, and whether they are suitable for clients’ needs and work in their best interests.
Equity release may involve a lifetime mortgage or home reversion plan. To understand the features and risks, please ask for a personalised illustration.
Bower is an FCA regulated independent financial advice company that offers specialist advice on equity release throughout the UK. For more information email info@brsequity.co.uk or call 0800 4118668.
At Bower Home Finance, we will understand your unique circumstances and advise you to ensure you are receiving the best plan to meet your objectives. There are plans that allow you to make voluntary repayments and move home, subject to lender criteria. However, early repayment charges may apply in certain circumstances.
Bower Home Finance provides independent, impartial whole of market equity release advice with an award-winning customer service experience. Initial advice is provided at no cost to you and without obligation. Only if you choose to proceed and your plan completes, would a typical advice and administration fee of £1,695 be payable.
Equity release requires paying off any existing mortgage. Any money released, plus accrued interest to be repaid upon death, or moving into long-term care. Equity release will reduce the value of your estate and your entitlement to means-tested benefits now or in the future, and impact long-term care funding. If you are considering equity release, we strongly recommend that you read our Equity Release page carefully and talk to one of our specialists before deciding if you wish to proceed.
If you are considering equity release, we strongly recommend that you read our equity release page carefully and talk to one of our specialists before deciding if you wish to proceed.
To find out more about any of the products and the service we provide, please call us on freephone 0800 411 8668, request a call back, email us, or join our live chat you’ll find on our website.
Please be aware that equity release may involve a home reversion plan or lifetime mortgage which is secured against your property. All features and risks are thoroughly explained in your free personalised illustration.
