The sum paid out by equity release plans topped £2 billion for the first time last year, the Equity Release Council said. Equity release allows you to release a tax-free lump sum from the equity locked in your home. You can do this without having to move. The £2.15 billion lent was a third higher than in 2015. Typically pensioners released sums of almost £78,000.
Nigel Waterman, council chairman, said housing wealth was “becoming an especially relevant element of retirement planning”.
What is equity release?
It is designed for individuals aged 55 and over to release money from the property they live in without having to make any regular repayments. There are two types of equity release-
- Lifetime Mortgages
- Home Reversion plans.
Both are regulated by the Financial Conduct Authority. Using an these products allows you to draw a lump sum or regular smaller sums from the value of your property. You can still do this while remaining in your home.
It can play a role in retirement funding and the money can be spent on anything you like.
Darren Amos from Anstee & Co feels that this is set to increase this year.
“Many people holding interest only mortgages, generally of retirement age, will struggle to repay the capital. This may resorting to selling their home. This could result, if people are aware of equity release, a growth in the sector, far above the current 2017 projections”.
However, Darren feels this is only likely to happen if lenders of interest only mortgages make their clients aware of the existence of equity release.
What can you use the money for?
Equity release can play a role in retirement funding and the money can be spent on anything you like:
- Your grandchildren’s private education.
- Special treats such as a nice holiday or a new car.
- Maintaining your independence by improving your home.
- Helping your children or grandchildren get on the property ladder.
- Pay off your existing mortgage or credit card debts.
- Improve your general standard of living.
How we can help you.
All our expert financial adviser have additional qualifications in this field. We have office in Kettering, Stamford and London. If you live in Northamptonshire, Bedfordshire, Lincolnshire or Warwickshire meeting can be arranged at your home. Our financial advisers also make use of meeting rooms in Northampton, Wellingborough, Bedford and Towcester.
As equity release is long term lending we would recommend that it is something that you do not rush into. Maybe talking this through with your family maybe good idea.
To find out more about equity release and to see is it right for you, vist our wesite for more information.
Finally, Anstee & Co is proud to be a member of Equity Release Council.