Should I consider Equity Release?

Many people benefit from equity release, but it is a big decision. You should always consider the consequences of equity release and any alternatives that you might have available.

Where the money is needed for essential expenditure, such as repaying an existing mortgage, you should think about other options. For example, you might sell your current home, pay off the mortgage and buy a smaller place with the remaining money. Local authority grants or other benefits might be available to help maintain the home. You should also consider whether it would be better to use existing savings or investments, if they are not earmarked for any other purpose, and defer equity release for future years.

Where remaining in the family home is important, or the upheaval of moving house is unacceptable, equity release might be the best option.

If the money is to support a nicer lifestyle, you should think about whether you are limiting your options for equity release that might be needed in the future, For example, to cover a shortfall if you have to give up work or the applicant with the bigger pension income were to die and leave their partner unable to cover normal expenditure. In these circumstances, could you manage your budget differently to reduce the immediate need for money.

Equity release is very likely to have an impact on your estate and the amount that will be received by your beneficiaries when you die. Of course, if the beneficiaries under your will are the one’s getting the benefit of a gift, if if there is nobody to leave money to, this isn’t so important.