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Explore Retired Life Viably With An Equity Release Scheme

By Mark Gregory on the 28th September 2010

People who eventually retire from their work look forward to spending the rest of their lives comfortably. For these retired individuals, retirement should be a period of less worry & no work. In effect they will have more free time and can therefore concentrate on the happiness of seeing their family grow up.

However, unless there has been many years of retiremnent planning, these dreams of a relaxing & an enjoyable retirement can suddenly turn sour.

With more time to spend money, retirement is also known as the ‘longest holiday of your life‘. You will be aware that holiday periods are probably the most expensive periods of life & are usually planned for a year in advance. Therefore, consider the holiday you will be entering, once you retire & the lengthy duration thereof.

The average person will retire between 60-65. Life expectancies are now reaching into the late 80's; therefore planning for this period should be all relative.

So, considering most people are not as disciplined at planning for their retirement as they are with their annual holidays, how can one rectify this issue once retirement is reached & they have insufficient provision to live on?

Well one of the solutions to this could be via equity release schemes which can provide a way to gain cash benefits without having to sell off the property.

Making use of the increase in realty prices

Real estate prices have increased significantly over the past few decades. By optimising these increases & climbing onto the property ladder, can pay dividends in the long run for your retirement.

In the forthcoming years, house prices should begin to rise again. In such a scenario, the home owner can further capitalise on the equity locked inside the house without having to sell the property. Having a constant income flow can ensure that the retired population can lead a high quality of life, even when their regular income has fallen sharply.

How can equity release help?

By continuing to maintain a rung on the property ladder, once retirement age is attained then it can be time to cash in on the equity built in the property during one’s period of employment. There are several ways of achieving this if a top-up to the state pesnion is required. Whether you are in need of income or a capital lump sum, equity release schemes can assist assuming certain criteria is met; a property value over £70,000 & a minimum age of 55. Therefore, even if early retirement has been taken for health or unemployment reasons there can still be financial help available with equity release.

Distinguishing features of equity release schemes

One of the main features of an equity release scheme is that the homeowner can retain 100% ownership of the home and at the same time can continue taking income or capital from the higher value of their home. The money which is released can be paid back to the equity release company at anytime in the future (subject to possible early repayment charges).

However, this is usually on the death of the property owner or them moving into long term care. Equity release is particularly beneficial to those who do not have family members to look after and do not need to pass on their property to the next generation.

The benefits of equity release schemes are many. Firstly the cash amount that is received by the owner of the house is exempt from income tax. Thus, the retired individual can continue taking equity from the property in order to supplement their lifestyle & thus make it the best holiday of their lives!

For further information on equity release & the current equity release schemes in the market, contact the equity release team on 0800 678 5159.

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Tags: Capital Lump Sum, Real Estate Prices, Equity Release, Equity Release Schemes

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