A report issued last week by the British Medical Council has highlighted that many older people were becoming ill over money worries. The report revealed that six out of ten pensioners were living below the poverty line.
Our view
Along with a number of other financial advisers, our view is simple - releasing equity from a home that you own could take these worries away. We have spoken to many retired people who live on minimum incomes yet are sitting on substantial wealth in their home. Most want to leave this wealth to relatives or friends in their Will. What many do not realise is that if they ever need residential care and they have assets in excess on £19,500 (including their home), they will have to pay for care in old age or the local authority may place a legal charge on your property to pay for the care - see Care Fees Adviser.com .
Our view is simple, once you reach a certain age you should make preparations to spend some or all of that money in a structured way.
Releasing equity is an ideal way to do this. There is now a special code called the Safe Home Income Plan scheme (SHIP), that offers much protection for people releasing equity such as the ability to release all or part of the equity from your home and still being able to stay in the property for the rest of your life. We know that older people have very traditional values about what they have and passing in on to loved ones.
However, if you do not spend some or all of it you may still have nothing to leave anyway if you need care!
Long term care help: Learn more about long tern care planning in the Care Fees Adviser.com.
Visit the client centre to download a couple of fact sheets on long term care.
Equity release help: Learn more about equity release in Mortgage Crazy.com.
Visit the client centre to download a fact sheet on equity release.
Read some of our features on care and equity release.