Equity release is on the up: Why is it becoming so popular?

Retirement, pensions and ambitions

The truth is, for many people their retirement income is not enough to pay for the extras. Taking a sensible amount out of your property, while taking care to leave enough to loved ones, is becoming an increasingly popular move.

You don’t have to sell your home, downsize or even give up any ownership to get money out of your property. People releasing equity are able to stay in the place they call home, while enjoying the extra cash.

Why are more people releasing equity each year?

Everyone has their own reasons, but it essentially comes down to wanting a more comfortable, enjoyable lifestyle:

  • To pay for home and garden improvements
  • To help your loved ones financially at a time when they can put it into good use, e.g. weddings, businesses, education, property
  • To help clear your existing mortgage and bills, freeing up monthly payments
  • To pay for the things your retirement income won’t, such as holidays, hobbies, cars and other treats

Are there any downsides?

There are always things to consider when it comes to money. Equity release is no different.

It could affect your entitlement to state benefits. Or course, by taking out money now, there will also be less to leave in your estate.

Historically, property prices have risen in the long-term, which could replenish some of the equity taken out today. There is no guarantee of that, but house prices have risen by 537% in the last 30 years.

When releasing equity through a reputable company, an adviser would usually be available to talk through any issues you may encounter.

How it works

Homeowners aged 55 and over can receive a tax-free lump sum from their property to spend as they wish.

Rather than making monthly repayments, the interest is added and repaid with the original amount when the homeowner passes away or goes into full-time care.

There’s also an option to have an additional amount kept on reserve which accrues no interest until you use it—a handy money-saving feature.

Whether you're curious as to how much you can release, or you want to take the initial steps towards releasing equity, our handy calculator will give you the information you require.

You can also contact us on 0800 029 1233 to discuss your needs with a view to arranging a no obligation face-to-face home visit with one of our financial advisers.

The Flexible Lifetime Mortgage is by leading insurer Aviva and is only available through qualified financial advisers such as those working with the Reader’s Digest Equity Release Service.

*(Equity Release Council Lending Figures Q3 2010 – Q3 2015)

Reader's Digest Equity Release is a trading style of Responsible Life Limited. Responsible Life Limited is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register (http://www.fsa.gov.uk/register/home.do) under reference 610205. In using this website I give express consent to Responsible Life Limited to contact me on the details provided from time to time. Calls may be recorded for training and quality purposes. This is a Lifetime mortgage which may reduce the value of your estate and may affect your entitlement to state benefits. To understand the features and risks ask for a personalised illustration. Any information contained herein is a personal opinion of the author and should not be considered to be advice of any kind. Inheritance Tax planning is not regulated by the FCA. Think carefully before securing other debts against your home. By consolidating your debts into a mortgage you may be required to pay more over the entire term than you would with your existing debt. Only if you choose to proceed and your case completes will Responsible Life Limited charge an advice fee, currently not exceeding £1,295. Our adviser will talk through the setting up costs of a lifetime mortgage before you make any decision to proceed.