The Question
My husband was a self-employed builder/handyman and has recently retired from work. He’s 73 and was putting off retirement because we both know he has very little in the way of a pension. Now we don’t have an income coming in, the lack of pension is hitting home. We wondered if we would be eligible for equity release.
We both have our state pension, and I have a small pension from a part-time secretarial job. But, otherwise, we have nothing. We own our own home and are mortgage-free.
Mark’s Answer
Thank you for your question and like many households in the UK, you have recognised that the equity in your home may be an option to raise capital for your retirement plans.
Unfortunately, as you have only provided some very basic information, I am not able to say if you are eligible for equity release; however, please find some information and feedback for you to consider.
I would strongly recommend that you telephone one of our advisers using our freephone number 0800 802 1051 as they can provide you with figures and information that will help you greatly, or alternatively, you can use the smartER tool on the website to complete your own research.
I can confirm that the basic requirement is that you must be over 55 and own your home which must be worth at least £70,000. You have confirmed that you have no mortgage, so based on your information two out of the three basic conditions have been met.
A flexible Lifetime mortgage, which is the most popular type of equity release, is a loan that is secured against your home just like a conventional mortgage, however with a lifetime mortgage the interest rate is fixed for life.
We work across thew whole of the equity release market which includes well known providers such as Aviva, Legal & General, LV=, Pure Retirement etc would lend you a tax free lump sum of capital for the rest of your lives, or until you need long-term care.
The unique feature of a lifetime mortgage is the flexibility of making payments because the decision is yours. You could pay some of the interest, all of the interest, or all of the interest and some of the capital, or make no payments at all, the choice is yours depending on your personal circumstances. These payments are purely voluntary, and as such there is no proof of income requirement or affordability assessment done by the lenders.
As noted, the key to this plan is independent financial advice, as an adviser can access the whole of the market without restrictions, to create and design a plan based on your personal requirements. Here at Equity Release Supermarket our advice is highly regarded, and you can read our Feefo reviews from many customers who have experienced our service as they planned and secured their retirement.
The good news is that the flexible Lifetime mortgage is available based on your age and the value of your home, and not your income.
One point to note from your information is that you both have a state pension and a small private pension, so before considering capital raising it would be advantageous to consider your entitlement to government benefits, and our advisers can help you by completing a benefits calculator on your behalf, then providing you with a personalised example of what you may be entitled to.
This example could then be used when you are discussing your entitlement with the Department of Works and Pension.
However, please note that if your claim were successful, this would not restrict you from applying for a Lifetime mortgage, it would just ensure that your adviser has maximised your income before you continue further capital raising, ensuring that anything they recommend does not impact on benefits you receive.
Meet our expert…
Mark Gregory, founder and CEO of Equity Release Supermarket, is here to answer your questions. Mark is an adviser himself with over 20 years equity release experience.
He launched Equity Release Supermarket 10 years ago and it has grown to become one of the UK’s leading equity release specialists.
Email kate.saines@emap.com to ask Mark a question
Loading ...