Equity release plans are a significant part of retirement planning in the UK which can make you feel more secure in facing your retirement. They are used in order to release money for various purposes, such as acquiring a new car, arranging a holiday, or just making everyday life more comfortable. Such plans basically give you the right to borrow money against the value of your house, with the debt being cleared from the proceeds from sale when you die. To qualify for an equity release plan you should be at least 55 years old.

You can be given a lump payment (which might amount to tens of thousands of pounds), a monthly income (which could be a hundred pounds and more) or both at the same time.

There is usually no tax on money taken out according to an equity release plan, but in case the released money is then invested into a business there can be tax on income or growth.

You are not obliged to move residence or sell your home. Equity release schemes with a good reputation can provide you with a creditable guarantee that you will have the right to go on residing in your property until you die, and in most cases with an opportunity to give a share of the property’s value to your children and other relatives. Naturally, for those who don’t have family, equity release loans might be quite attractive.

Still, equity release cannot be called the best option for releasing cash. It is strongly recommended to consider other ways of raising funds before choosing this route.

Thus, if you think that equity release loan is your last resort, your first step should be to do a thorough research, which might necessitate initial contact and consultations with experts who are selling the product and experts who are involved in the legal side.


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