Equity release: Unlocking your wealth - sponsored feature

Square One Law partner Francesca Angelucci assesses equity release options - sponsored feature

Unlocking wealth from your home
Unlocking wealth from your home

Recent reports suggest that retired homeowners are increasingly using equity unlocked from their homes to help manage their financial commitments.

According to Key Retirement’s latest Market Monitor report, nearly £341m of property wealth was released in the first three months of 2015, up from £330m last year. The most common reasons are for home improvements however there has been a marked rise in the number of people using equity release plans as a way to pay off debts or to support their families.

The average amount released specifically to boost retirement income has also increased and reached nearly 9% to £66,730 in the three months compared with £61,200 last year.

Equity release plans are a way for homeowners over the age of 55 to release funds on the basis that the loan is secured against their property and is only repayable upon sale of the property or in the event of death or leaving the property to go into permanent long term care.

The plans can be attractive as nothing usually has to be paid back until the mortgage holder dies or sells their home. The plans secure a flexible way of releasing money so policy holders retain full ownership of their property without the worry of meeting regular monthly repayments.

The additional bonus is that most equity release plans offer a no negative equity guarantee, which means that the amount repayable under the plan will never be more than the amount the property is sold for.

Whilst this may appear to be a win-win situation, if you are considering equity release, you need to bear in mind that it will reduce the value of your estate and may also affect your tax position as well as your entitlement to state benefits further down the line. If you are considering an equity release then you ought to obtain specific advice on these issues before committing to any loan of this nature.

The impact of future house price inflation should also be taken into consideration when weighing up equity release plans as this will also significantly impact the value of your estate.

As with all personal finance offers it is important to weigh up your options, and, as is often the case, it can be wise to not “put all of your eggs into one basket” when considering your retirement funds. However, it is advisable to consider complementary streams of income such as pension plans and equity release schemes. The demand for equity release plans are on the rise and can be a great and flexible product so if you’re in any doubt about your options and the best route to take, then seek professional advice.

What to do next

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Any investment mentioned in this article is for illustrative purposes only and is not intended as investment advice. Any tax advantages mentioned are based on current legislation accurate at the date of print which is subject to change. The opinions expressed in this document are not the views held throughout Brewin Dolphin. No Director, representative or employee of Brewin Dolphin accepts liability for any direct or consequential loss arising from the use of this document or its contents

Brewin DolphinBrewin Dolphin

Brewin Dolphin is one of the leading providers of wealth management services in the UK and we have been helping clients make their money work harder through economic ups and downs since 1762.

In an age of widespread digital communications, we still believe that getting to know you personally and understanding your aspirations is the key to success. We tailor investment portfolios to your needs and provide a full range of financial planning services to create a meaningful strategy that will meet your financial and lifestyle goals.

With a large office in Newcastle, we have an expert team of investment specialists and financial planners who can help you to develop a sound strategy for managing your financial affairs and safeguarding your long-term wealth.

For more information, please visit www.brewin.co.uk/newcastle


Business & IP Centre NewcastleDeloitte

Deloitte is a leading professional services firm, with an office in Newcastle, which provides audit, consulting, financial advisory, risk management, tax and related services. Its diverse North East client base ranges from owner-managed businesses to multinational corporations.

For more information, please visit www.deloitte.com


Square One LawSquare One Law

Square One Law is an entrepreneurial, commercial law firm, based in Newcastle upon Tyne. The firm offers a wide range of legal services including: banking, commercial, commercial property, corporate, employment, litigation and private client. In 2014 Square One Law was awarded Insider Dealmaker’s “NE Corporate Law Firm of the Year”.

For more information, please visit www.squareonelaw.com

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