Equity release

Questions about equity release

To fully understand your retirement income options, we recommend you speak to your financial adviser. If you don't have a financial adviser, you can find one locally by using Unbiased.co.uk

Will I qualify for equity release?
How much can I borrow?
Where can I get an equity release product?
Are they safe?
What happens if my circumstances change?
What can equity release be used for?
What are the alternatives to equity release?
Are there any limits on what I can release?
Can I use an equity release plan as a way of reducing inheritance tax?
Will I still own my home?
What happens if I want to move house?
What happens to my partner if I die?
Can I get into negative equity?
Are there any other guarantees in place?
Will I need legal advice?
Where can I find out more about equity release?
What are the different types of equity release?
How does the Roll-up Lifetime Mortgage work?
How does the Fixed Lifetime Mortgage work?
How do Just Retirement’s equity release plans differ?
Are there any other types of lifetime mortgages?
What exactly is a home reversion plan?
Where can I find a suitable financial adviser?

Will I qualify for equity release?

To be eligible for our equity release products you need to be 60 and over (it is 55 for some other providers) and own your own home. Your home will need to be in good repair and you will need to live in the UK. To find out if you are eligible we would recommend speaking to your financial adviser. If you don’t currently have a financial adviser you can find one locally using the web-based service Unbiased.co.uk.

How much can I borrow?

The amount you can borrow will depend on your age, your property’s type and value, and in some cases your health and lifestyle. For a quick indication of how much you could borrow using one of our products go to our equity release calculator. Alternatively speak to your financial adviser. If you don’t currently have a financial adviser you can find one locally using the web-based service Unbiased.co.uk.

Where can I get an equity release product?

You can purchase an equity release product directly from some providers. Alternatively you will need to speak to your financial adviser who will search the market on your behalf.

Just Retirement Limited provides its equity release plans through financial advisers as opposed to direct to the public. However our sister company Just Retirement Solutions is a specialist equity release advice service which can help you compare products from a panel of equity release providers, including Just Retirement Limited.

Are they safe?

Both lifetime mortgages and home reversion plans are regulated by the Financial Services Authority (FSA). The FSA protects you in the event your provider fails, or against unlawful practices. To find out more about the protection provided, visit the FSA website.

What happens if my circumstances change?

Equity release products are designed to be a lifelong commitment. If your circumstances do change you may be restricted on what you can do. We would therefore recommend that you speak to your financial adviser, or to your equity release company in the first instance.

What can equity release be used for?

You can spend the money you unlock from your home on whatever you like. Common reasons for taking out equity release include the desire to maintain a certain lifestyle into retirement and to finance one-off events. Additionally, some people simply do not want to move out of their home and away from family and friends but need additional finance to be able to stay there. However, equity release is not suitable for meeting short-term borrowing requirements and you should consider the implications of committing yourself to this type of product. Your financial adviser will be able to help you consider all your options. Uses of equity release

What are the alternatives to equity release?

Moving home to a smaller property or to a different area can generate a lump sum. Also, being retired does not stop you being able to borrow against your property via a standard loan or mortgage. If you need to make home repairs or improvements contact your local council as you may be eligible for a grant.
More alternatives to equity release

Are there any limits on what I can release?

Yes. There will be a minimum and maximum limit, but this will vary according to the provider and the type of plan. Other factors such as your age and the type and value of your home will also determine the amount of money you can release. At Just Retirement Limited our minimum advance is £10,000 and the maximum is £600,000 if you live in England and £250,000 if you live in Wales, Scotland and Northern Ireland. If you live in England, advances of over £250,000 are on a lump sum basis only and do not include a cash facility. Try our equity release quick calculator.

Can I use an equity release plan as a way of reducing inheritance tax?

If you take out an equity release plan you will reduce the value of your estate, so this may reduce any inheritance tax liability you have. However, you should not use this type of scheme for tax purposes without first seeking professional advice from a financial adviser.

Will I still own my home?

If you opt for a lifetime mortgage, you continue to own your home and any increases or decreases in its value affect the value of your asset.

With a home reversion plan, the share that you sell transfers to the company that provides the plan and you are required to give up the deeds. If your property increases in value you will only benefit from the increase on the proportion that you still hold.

Types of equity release

What happens if I want to move house?

If you have a lifetime mortgage, so long as the new home you wish to move to meets the acceptance criteria of your equity release company then you should be free to move. In some circumstances, such as if you were to downsize to a smaller property, a part repayment of the equity released may be required.

What happens to my partner if I die?

If the equity release plan is in both your names then it will continue until the death of the last surviving person. However, if your property is in your name only and the plan is taken out in your name only, the property would have to be sold and your partner would have to find somewhere else to live (unless, for example, they were able to repay a lifetime mortgage in full).

Can I get into negative equity?

Not if the company you choose is a member of SHIP (Safe Home Income Plans). If the amount required to repay your mortgage ends up being more than the eventual value of your property upon sale, equity release providers who are SHIP members cover the loss. They have absolutely no claim upon any other assets in your estate. This is called a no negative equity guarantee.
More about the no negative equity guarantee.

Equity release plans are long term commitments designed to be repaid only when you die or move permanently into care. If the plan is repaid prematurely there could be a substantial early repayment charge. Different lenders calculate these charges differently. The amount concerned will be detailed in your equity release company's plan documentation.

Are there any other guarantees in place?

If you are thinking of taking out an equity release plan, then deal with an organisation that is a member of the trade body Safe Home Income Plans (SHIP). Just Retirement Limited is a member of SHIP and undertakes to abide by its code of practice. This is designed to protect customers and, in addition to the no negative equity guarantee, they promise to provide a clear presentation of their plans. Once you have decided on the plan which most suits your needs, SHIP members usually require your solicitor to sign a certificate confirming that the plan has been clearly explained to you. For more information, please visit the SHIP website.

Will I need legal advice?

Yes, you will need to appoint a solicitor to oversee the transaction, help you protect your interests and make sure you understand the risks, commitment and the details of what you will be signing up to. You will be responsible for paying any legal fees.

Where can I find out more about equity release?

Equity release plans can be complex and may not be suitable for everyone who considers them, so it is always advisable to speak to an adviser, who will be able to recommend the right product for you. You should also be well informed about the different types of equity release plans on offer. Please refer to the information on this website - however, the most comprehensive way of finding out about equity release and the best options for you is to consult a financial adviser who specialises in retirement.
What is equity release?

What are the different types of equity release?

There are two main types of equity release – lifetime mortgages and home reversion plans. The most important difference between the two is that with a lifetime mortgage you still own your own home and with a home reversion plan you sell a percentage share of your home to a reversion company in return for a lump sum or a lifetime income.

The other main difference is that with a lifetime mortgage, the fixed interest rate agreed at the time you take out the plan accrues as compound interest over the years. With a home reversion plan, there is no interest accruing - the price offered for the percentage of the property you sell reflects the time span the reversion company expects the plan to run. Just Retirement Limited does not offer a home reversion plan.
Types of equity release

How does the Roll-up Lifetime Mortgage work?

The Roll-up Lifetime Mortgage gives you a cash lump sum and a facility to come back for more in the future if you choose to. Interest is charged on the initial loan and on any further withdrawals when and if you make them. Interest is 'rolled up' or added to the loan each year but you do not have to make any repayments until your home is sold - either when you die or move permanently into care.
More on our Roll-up Lifetime Mortgage

How does the Fixed Lifetime Mortgage work?

Our Fixed Lifetime Mortgage gives you a cash lump sum and a facility to come back for more in the future if you choose to. You agree at the outset with the lender that you will pay back a fixed amount when your home is sold - either when you die or move permanently into care. The figure will depend on your age and health.
More on our Fixed Lifetime Mortgage

How do Just Retirement’s equity release plans differ?

Just Retirement Limited is a specialist in providing innovative financial products for those at and in retirement and our products are particularly notable for their flexibility. For example, we allow you to draw down a number of smaller amounts rather than a single cash payment. In our experience many people who decide to use equity release are unsure how much they will need to unlock. Some companies only offer the opportunity to release money once, which means you may take out too much or too little. At Just Retirement Limited, we will let you know the total amount of money you can release subject to a £10,000 minimum initial advance and leave you to decide what amount you require and when, allowing you to make withdrawals when it suits you subject to a £2000 minimum per withdrawal. You only pay interest on what you've actually taken.

Are there any other types of lifetime mortgages?

Some providers offer interest-only lifetime mortgages, where you get a cash lump sum and pay the interest due each month at a fixed or variable interest rate. The initial amount is repaid when your home is sold - either when you die or move permanently into care. Some interest-only plans allow you to stop your payments after a certain period of time and allow the plan to change to a roll-up lifetime mortgage from that point on. Just Retirement Limited does not offer this type of plan.

What exactly is a home reversion plan?

A reversion company buys part or all of your home and you will normally be paid less than the full market value. You can get the money as a cash lump sum or income. You will also usually get a lease giving you the right to carry on living in your home for the rest of your life. Always check the terms of the lease to make sure you understand them. The minimum age for these types of plan is usually higher than for lifetime mortgages.

Where can I find a suitable financial adviser?

You can find an adviser qualified to advise on equity release by searching on the website Unbiased.co.uk.

Alternatively, our sister company Just Retirement Solutions offers advice on equity release and compares products from a panel of leading providers. To contact them, click here - advice is with no obligation.

No negative equity

Read more about our no negative equity promise