The Equity Release UK Market
A growing number of elderly people are turning to equity release in the UK as a way of significantly boosting their income. By choosing an equity release plan in the UK you could enjoy a more comfortable and secure retirement. So if you are a homeowner and you’re over 55 years old, you can turn some of the value of your home into a tax-free cash sum or a regular income for life.
Choosing an equity release plan
Equity release in the UK falls into three main categories. They are lifetime mortgages, drawdown lifetime mortgages and home reversion plans. There are many independent equity release specialists in the UK who will be able tell you about the different plans on offer and guide you every step of the way to help you can find the plan that best suits your requirements.
Are you eligible for equity release in the UK?
In most instances, you and your partner must be aged 55 or over to qualify for equity release in the UK (65 if you’re considering a home reversion plan). Your home must be worth £50,000 minimum and you must be in a position to clear any outstanding credit secured on the property from the equity you release.
General pros and cons of equity release in the UK
• Allows you to free up a lump sum of tax-free cash to be more comfortable in later life
• Enables you to remain in your own home for the rest of your life
• There are no regular repayments to make and you are covered by a ‘no negative equity’ guarantee
• Can reduce the inheritance tax bill faced by your estate
• Equity release in the UK is a lifelong commitment
Regulation in the Equity Release UK market
The Financial Services Authority (FSA) regulates equity release in the UK. FSA regulation means that equity release providers have to adhere to certain rules and guidelines, which are designed to protect and serve the buyers.
Additionally, Safe Home Income Plans (SHIP) is a voluntary code for UK equity release companies to abide by. If a provider is a member of SHIP then they have to follow a code of conduct and offer a set of guarantees to their customers.
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