Capital disregard increase praised by SHIP
Safe Homes Income Plan, the company dedicated entirely to the protection of equity release plan holders and promotion of safe home income and equity release plans, has praised the Government’s recent decision to increase the capital disregard level to £10,000, in line with many equity release drawdown minimums.
SHIP has been lobbying to raise the minimum levels to make sure equity release clients’ state benefits are safe; while the capital disregard sits at £6,000, any drawdown scheme set at a minimum of £10,000 jeopardises the legitimacy of the borrower’s benefit claims.
Alistair Darling recently raised the minimum as of November 2009 and SHIP advise that no benefits will be at risk and equity release drawdown products become all the more attractive to elderly borrowers.
Andrea Rozario, the SHIP director-general says:
“Previously advisers were worried about explaining the risks of drawdown, it made it a riskier product for borrowers who rely on state benefits. There were loopholes round the problem, but these were complicated and lengthy.”
“SHIP is delighted the Government has made this decision”, says Rozario.
“Now, with the capital disregard soon to be raised, no one’s benefits will be at risk when they take out tranches of £10,000. This will have a huge, positive impact on the equity release sector,” she says.
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