Equity Release..

The issues surrounding pensions affect us all, but it is already a very real and daily challenge for millions of retired Britons, many of whom are on fixed incomes. However, many retired people who manage on a small pension and limited savings are also living in properties which over time have substantially increased in value.

In simple terms, equity release is a way of releasing equity from a property, whether to buy a new car, to pay for a holiday or home improvements, or simply to make daily life more comfortable. These schemes essentially allow you to borrow money against the value of your home, with the debt being repaid from the sale proceeds after your death.

Equity release plans can give a lump sum, a regular income or both. The lump sum could be tens of thousands of pounds; the income boost might be worth as much as a hundred pounds a month or even more. In both cases the money will be tax free, but if you receive means-tested state benefits, these could be reduced or lost altogether. It is important therefore to check the rules before you take out an equity release plan.

There are various types of equity release scheme including lifetime mortgages, home reversion plans, interest only mortgages and home income plans. These have different benefits and drawbacks and varying degrees of complexity. Arranging an equity release plan is a major step and making the correct choice is vital, as some types of schemes cannot be undone once in place. Add to this the fact that in many cases your house may not only be the most expensive asset you own, but that it is also your home, and the need for professional advice is essential.

There are a variety of matters to consider. First and foremost – what are the alternatives to equity release? Having considered this, if it is then decided to proceed with an equity release scheme, which type would be best for your particular situation? Will it allow you to borrow more at a later date? Can it provide both a lump sum and an income? Will there be a penalty charged if you move house? Can you protect some of the equity in your home for your family? How will it affect your estate and any Inheritance Tax liabilities? How will it fit in with your other financial plans? These are just a few of the matters that need to be thoroughly considered.

At Coast to Coast, we have the experience and specialist qualifications that enable us to provide personalised independent financial planning advice for your specific equity release needs, no matter how complex they may be.

Following an initial meeting which is conducted without charge or obligation, and at which we will examine all relevant issues, we will also discuss the appropriate payment options if you wish us to act for you. If you then wish to proceed, you decide which of these payment options you would like to select. These options are informed by the fact that equity release providers will in general pay a commission of around 1% of the loan amount, so it makes sense to use this wherever possible to offset our charges.

The payment options are:

Either a fixed fee of £395 of which £195 is charged for pre-application advice given at a second meeting, with the balance of £200 charged on production of a formal offer from the scheme provider. On completion of the scheme, 40% of any commissions received by Coast to Coast Financial Planning Services in excess of £600 from the scheme provider will be rebated to you.

Or a fee of 0.75% of the mortgage facility or reversion amount, subject to a minimum of £995, chargeable on application, with all commissions received from the scheme provider by Coast to Coast Financial Planning Services Limited refunded to you.

Equity Release includes home reversion plans and lifetime mortgages. To understand the features and risks ask for a personalised illustration.