Equity release made clear
If you’re retired and living on your pension you may be considering equity release as a way of getting cash from the value of your home. Find out how it works.
If you own your own home and are 55 or over, you may be thinking about equity release because it could provide you with a lump sum, additional income or both. You might also consider equity release for tax-planning reasons.
In this section, you’ll find out how equity release schemes work and what you might think about before starting one.
If you’d like more detailed information get our Equity release schemes – Raising money from your home guide. You can download it at Free printed guides, where you can also order it online.
Before considering equity release
It’s important to check whether there are other ways you could meet your financial needs before choosing an equity release scheme. Some ways might be to:
- claim any benefits you might be entitled to – see Related links;
- check to see if your local authority can help you to pay for essential home improvements – see Related links;
- trace any pensions you may have lost track of, using the Pension Tracing Service – see Related links;
- use your savings or sell your investments, but consider getting advice before doing so – see Related information; and/or
- sell up and buy somewhere smaller and cheaper (downsize).
What is equity release?
Equity release is a way of getting cash from the value of your home. These schemes can be helpful in certain circumstances but are not suitable for everyone. For example, they can be expensive and inflexible if your circumstances change in the future and may affect your current or future entitlement to State or local authority benefits.
How does it work?
You can either secure borrowing against your home or sell part or all of your home. This can give you a regular income, a lump sum, or both.
You are more likely to qualify for an equity release scheme if you have no current mortgage, or if any mortgage you have is relatively small.
