It seems that the days of ‘bad news’ equity release plans will soon be a thing of the past, especially as the Government is intending to offer it themselves! The details from the Government are sketchy at the moment but we do know that they will give their backing to a particular scheme that allows equity to be taken from pensioners’ homes, without affecting their State benefits. The Government has confirmed that winter fuel payments, council tax rebates and State pension benefits will not be affected.
Apparently, upto 40% of the home’s value could be unlocked and paid as income. Lump sums will not be allowed. The loan itself and interest would be repaid to the Government on death.
Our View
Depending on your view of the Government, them offering an equity release product will either give you confidence in the idea or not. But, the Government is not a financial adviser and their offering will most definitely not suit everyone.
We have always said that equity release is a perfect product for the right people. It can also be a very bad product for others. Our tip to people looking at the equity release market is to take independent advice. There are many companies that offer products and not all of them subscribe to the voluntary code of SHIP (Safe Home Income Plans), so please beware.