Advantages Disadvantages of Equity Release Schemes

The Advantages and Dis-advantages of Equity Release Schemes

Advantages:

• Improving your quality of life

• Improving your cashflow

• Release money for large capital expenses

• Increase income

• Control

• Spend money that may otherwise be means tested later for care fees

• Spend money that may otherwise be suffer inheritance tax

• Protected from negative equity if scheme is under Equity Release Council Rules

• Flexibility to increase/drawdown more capital in future

• Simple

• Stay in your own home

• Make home improvements

• Protected by financial regulator

• Protected by Financial Ombudsman Service

• Only specially qualified financial advisers can advise you

• Legal advice to protect you

• Free to move home or downsize in future

• Free to make financial gifts to family

Dis-advantages:

• Maintaining your home it is still your responsibility

• You will get reduced value and not full market value

• Interest rates are higher than normal mortgage rates

• If you do not spend the money released and leave it in the bank you may suffer reduced income support or council tax assistance benefits

• The longer you live, the greater the financial loss

• For Home Reversion, you lose future growth in the value of your home and there is no going back