Equity release could ease pension tax

Posted in General

9th April 2010

Homeowners may need to release equity from their home to combat new pensions tax rules in the Finance Bill.

According to SHIP, over 20,000 people took out equity release plans in 2009 and this number could rise in future as the new plans do not take inflation into account.

This means that those currently earning £130,000 are exempt from pensions tax, but in ten years, £100,000 will be the new threshold.

As a result of this, homeowners may want to release equity from their house to ensure financial freedom in the future. This can be done in the form of a lump sum, or as a regular additional income over a period of time.

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