Equity release is designed to be a lifelong commitment, so we recommend you involve your family in your decision.
It is not right for everyone, and since it is such a big decision it is essential to take specialist advice which takes into consideration all aspects of your financial situation.
Short term considerations
- In the short term, taking out equity release may affect your tax position and entitlement to state benefits - always ask a retirement specialist to assess the potential effects. Find out more
Long term considerations
- In the long term, releasing money from the home will reduce the value of your estate and therefore the inheritance that you will be able to leave your family when you die; it is likely that the house will need to be sold to repay the equity release company, although you will never owe more than the value of your home thanks to the 'no negative equity' guarantee in place by companies who are members of Safe Home Income Plans (SHIP). Read more about the 'no negative equity' guarantee.
A checklist
Below is a checklist of some of the things to consider before taking out equity release:
- Your future plans
- Any ongoing commitments you may have
- Your general state of health
- The possibility of moving home
- Your ongoing income needs
- How you feel about the inheritance you wish to leave to your family, and how that will be reduced by equity release
- Your eligibility for state benefits and the potential impact of equity release. Read more about what the state provides.
- The alternatives to equity release. Read more about the alternatives here.
Equity release may involve a lifetime mortgage or a home reversion plan. To understand the features and risks, ask for a personalised illustration.
Useful links Uses of equity release
Moneyadviceservice.org.uk - unbiased advice on equity release
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