Equity release is a big decision. So be sure you get all of your questions answered before entering into a plan, either by using our FAQ page, or by speaking to a financial adviser.
If you’re looking for an explanation for a confusing term, check our equity release jargon buster.
Am I eligible for equity release?
Are there alternatives to an equity release plan?
Will equity release affect my state benefit entitlement?
Does the cash I release from my home get taxed?
Can I move home if I want to?
Would my partner have to move when I die?
What happens if I have to go into care?
Can I leave an inheritance?
What about if I don’t need all of the money right now?
Can I do what I want with the money?
How much can I release?
Can I end up owing more than the value of my home?
Are there any fees to pay?
Does equity release mean that I’m renting my home?
What are the risks of an equity release plan?
What happens if I die in the early years?
To be eligible for equity release:
^Minimum age, property value and eligibility varies between product providers.
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Yes, there are alternatives. You could move to smaller home, or even move to a cheaper area to release the money you need. You might be able to take out a loan or mortgage to raise the cash as well.
There are other alternatives too, such as staying in work a little longer, as well as making sure that you shop around for the best pension annuity and making sure you are receiving all the state benefits you are entitled to.
Weigh up your options carefully, and seek financial advice if you are unsure which route will be best for you.
Maybe. Some state benefits are means-tested, so releasing a lump sum from your home may affect what you’re entitled to. Our equity release advice service (provided by Just Retirement Solutions Limited) contains a comprehensive state benefit check, so you can make an informed decision based on your own personal circumstances.
The cash lump sum released from your home is tax free. However, if you then place this money in a savings account, purchase an annuity or an investment, tax may be payable on any interest, income or gains you receive.
All providers that are members of the Equity Release Council, have to allow you to move if you want to, without charging a penalty - subject to the new property meeting the lender’s acceptable property criteria.
It depends on whether the equity release plan is taken out in joint names. If it is a joint plan, then your home will only be sold when you have both died. But if you take out the plan in just your name, then your home would have to be sold and your partner move (unless they could raise the funds to repay what you owe).
It depends on the plan you choose and if the plan is in joint names or just one name. If the plan is in your sole name and you have to go into permanent residential care, your home may have to be sold and the amount you released repaid.
Yes you can still leave an inheritance and release equity from your home. There are two types of equity release plan, and you have the option of leaving an inheritance on both:
It’s important that you involve anybody who you’d like to leave an inheritance to when arranging an equity release plan.
Our equity release advice service, provided by Just Retirement Solutions Limited, actively encourages you to have close family or friends present at consultations to make sure everybody with a vested interest is aware of how equity release will affect any inheritance you wish to leave. Although you can still leave a legacy to your loved ones, equity release will affect the value of your estate.
Some lifetime mortgage providers offer what is known as a “drawdown” option. This means that you only release the money you need from your home, when you need it. The advantage of this is that interest isn’t charged until the money is released.
Yes, you can do what you want with the money: a holiday of a lifetime, purchasing an annuity, it’s up to you.
The amount you are able to release will depend on:
There are also other things that will affect the amount you can release, such as whether you want a joint plan with a spouse or partner, or whether you want to leave an inheritance.
Most lifetime mortgages carry a ‘no negative equity guarantee’ and, although the loan is secured against your home, it means that you’ll never owe more than your home is worth. With a lifetime mortgage, although there are usually no regular payments to make and nothing to pay back until the end of the plan, the amount you owe will continue to grow. Interest is applied on the amount borrowed and on the interest already accrued over the long-term.
Our equity release advice service only uses providers that are members of the Equity Release Council. Council members guarantee that you will never owe more than the value of your home.
Yes. There will generally be arrangement fees, legal fees, valuation fees as well as any financial advice fees to pay. While some of these may be able to be added to the amount you release, others may have to be paid upfront.
Remember that by adding fees to the amount of equity you release, the greater the proportion of your home that will be owed to the plan provider (or the less money you will be able to release).
No. with both types of equity release, you remain responsible for insuring the property and maintaining it, even if you take out a home reversion plan and sell 100% of your property.
There are different risks, depending on the plan you take. See our Home Reversion and Lifetime Mortgage factsheets for more information.
This will depend on the type of plan that you take out:
The Moneyfacts Equity Release Advice Service is provided by retirement expert Just Retirement Solutions Limited.
Just Retirement Solutions has helped retirees release an average of £44,673* from their homes. Their advice is always quality checked and they only recommend plans that come with a no negative equity guarantee. Their expert team can answer your questions, guide you through the process and they’ll only recommend equity release if it is right for your circumstances.
With equity release you can stay in the home you love, and whilst the value of your estate will go down, it is possible to leave behind a legacy for your loved ones.
As equity release can affect your entitlement to benefits, everyone receives a full state benefits review. In fact 2 people in every 5 that Just Retirement Solutions speaks to are eligible to claim benefits and new claims can be worth up to £2,746 a year**.
Taking out an equity release plan is an important decision, so you’re welcome to invite friends and family to take part in your appointment.
*Average completed case size of unique JRS customers, between 2004 – 31 January 2016.
**Just Retirement Solutions research July 2014 – June 2015.
Call Just Retirement Solutions on 01737 233462. Lines are open 9am to 5pm, Monday to Friday (except Bank Holidays). Calls are charged at local rates and may be recorded or monitored.
Equity Release Jargon Buster
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