In certain circumstances, clients contact us to assist them with equity release schemes that they are proceeding to adopt.
Before we can assist with such queries, we always advise clients to obtain independent financial advice ideally from a member of Safe Home Income Plans (SHIP) but certainly from an adviser who specialises in equity release schemes.
It is critical that you consider very carefully before you enter into an equity release scheme about whether it is appropriate for you. The benefit is that you can release capital in your property to allow you to live more comfortably in your retirement but the negative aspect is that it can mean that there is no money to pass on to your family or friends when you die.
We set out below some important considerations before you proceed with such a scheme:-
1. If you obtain a capital amount from an equity release this can affect your entitlement to state or other benefits and may also affect your tax position more generally. You should seek the advice of an accountant, the Citizen’s Advice Bureau or HM Revenue and Customs before you proceed.
2. You should speak to your possible beneficiaries under your will before you proceed with an equity release scheme. They may be in a position to either lend or give you money to assist if you have financial worries and it is highly likely if they lend you money that it will be on better terms than any commercial lender will offer you. It is critical you do this as any beneficiary will want to assist if they can as in the long term, they will benefit more because an equity release loan will significantly reduce the amount they receive on your death.
3. Please note that typically in equity release schemes any such loan must be paid off if you enter into long term care so if this is likely to be imminent then you should not proceed with the scheme.
4. You should check that any mortgage offer you receive for an equity release scheme has a built in no negative equity guarantee. This means that the interest and capital sum you owe on the loan will never go above the actual sale proceeds of your property. This prevents you passing on a debt to the executors of your estate in respect of your property.
Having considered the above points and spoken to a qualified financial adviser and deciding that you do wish to proceed with an equity release scheme, please do complete the form below and we will be able to provide you with a quote for our work.