🔔 How equity release can allow you to help your loved ones

Use your property's wealth to support your family when they need it

Supporting your loved ones in achieving their dreams is an ongoing endeavour and retirement does not change that.

Research from Prudential shows that 31pc of people planning to retire this year are going to continue supplementing their nearest and dearest’s finances¹.

Your loved ones may be saving up for their first home or looking forward to their dream wedding. You may want to give them a flying start in life by gifting them a substantial sum of money, but what is the best way to do that?

Drawing upon your hard-earned savings or pension fund is not always a simple or sensible option.

You might be unable to contribute as much as you would like to your families’ aspirations without leaving your finances spread too thin. If you are a UK homeowner, then accessing a portion of your home’s value could provide a solution.

How your home could help

The popularity of using property wealth in later life is rising due to the controlled access offered by a specialist mortgage, known as a lifetime mortgage.

Over-55s used lifetime mortgages to release nearly £10m per day to boost their retirement finances between January and March this year alone².

Lifetime mortgages are loans secured against your home with no fixed end date, making them a valuable option choice because they can remove age as a barrier to lending.

There are multiple types of lifetime mortgages, all providing you with access to a one-off tax-free lump sum.

Each kind of plan has different features to match your unique situation.

With a Drawdown lifetime mortgage, for example, you have the ability to retain some of your equity in reserve, for use in the future as and when you need it.

An additional benefit to this practical option is that you only pay interest on the money you actually release, meaning that you have a level of control over the build-up of costs.

Furthermore, lifetime mortgages from Equity Release Council approved lenders have multiple safeguards for your peace of mind.

You and your partner remain the sole owners of your home for life, or until you both enter long-term residential care and there are no required monthly payments to make.

Additionally, you will never owe more than the value of your home thanks to the no negative equity guarantee. This also means that you cannot pass on any lifetime mortgage debt to your heirs.

When releasing equity, it is crucial to consider both your financial aims today and those in the future, as accessing some of your property wealth now may reduce the value of your estate and affect your entitlement to means-tested state benefits.

Fortunately, there are lifetime mortgages available to help you negate the impact upon your estate. To find the best plan for you, ask your adviser for a personalised illustration.

Once you have cleared any existing repayment mortgage, which can be done upon completion, the money is yours to manage as you wish.

The funds released could be the helping hand your family needs, while allowing you to take joy in seeing your legacy in action.

Notes

Responsible 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 under reference 610205. Only if case completes will Responsible Life Limited charge an advice fee, currently not exceeding £1,490.

¹ Source: Prudential ‘2018 PENSIONERS BANKROLLING THREE GENERATIONS’ 13.04.18

² Source: Equity Release Council ‘Equity release lending more than doubles in two years to reach £870m in Q1 2018’ 18.04.18

You might also like...