Equity release schemes are designed in a way that they allow older people to release equity against their property. If you are worried about income or cash flow during your retirement then equity release is an ideal option for you.

The options for retired people to raise finance can vary from credit cards, personal loans, mortgages & equity release. However, before any commitment is entered into all alternative avenues should be established: -

• Have you any savings that can be utilised?
• Can your children help you financially?
• Are there any benefits that you are entitled to that you are not claiming at present e.g. pension credit or council tax benefit?
• Have you considered taking a lodger should room permit?
• Can the local authority assist with any home improvements that you are looking to fulfill e.g. cavity wall insulation, loft insulation or central heating grant?

Once these avenues have been eliminated for one reason or another then if alternative finance needs sourcing, regulated financial advice should always be sought.

The next steps as to which form of finance is suitable would depend on age, employment & the actual amount required.

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Should the funds required be less than £10,000 then the only option of finance would be some form of personal loan. However, as the loan is usually only 5-10 years maximum the monthly payments can be expensive in relation to the retirement income & therefore be possibly ruled out.

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Another possible resource, could be a conventional or interest only mortgage such as the Halifax Retirement Home Plan. This mortgage is only available for those who have already retired & whose retirement income is sufficient to support a mortgage with monthly repayments.

However, if one’s income in insufficient to support this then the last resort could be an equity release plan. However, before resorting to this route you must always seek the advice of a specialist such as Equity Release Supermarket. They are able to ascertain your requirements & due to the independence can research the whole of the market to find the right solution for your individual needs.

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Because everyone’s financial needs are different then two different types of equity release schemes have been introduced.

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• Lifetime mortgages
• Home reversion plans

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Both these schemes offer you a lump sum amount of cash against your home. One of the main features of these schemes is that you can live in your home for the rest of your life. To qualify for an equity release scheme, you have to be over 55 years of age and own your own property. The value of your property must be above £70,000 & be of mainly standard construction & possibly mortgage free.

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Additional benefits of equity release schemes

Once you have applied for an equity release scheme then you will get tax-free cash which can be used for your retirement. Most people use this cash to improve their lifestyle, get a new car or repay their outstanding debts, however the funds can actually be used for whatever you wish to spend the funds on.

If you have decided to go for an equity release scheme then make sure that you hire an independent financial consultant. He will help you to deal with the complicated procedure of the scheme & ensure you receive the best advice in accordance with the SHIP standards & rules of the FSA.

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Should any of this article be of relevance to your situation or you wish to discuss whether equity release can be of benefit to you please contact the Equity Release Supermarket team on 0800 783 9652.