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How Can Equity Release Help Sustain Living Standards?

small model house next to a spilt jar of pennies

Recent statistics indicate that a yearly income of £30,600 provides a “moderate lifestyle” for retired couples, but the average income, including the state pension, is approximately £26,600. The equivalent for a single person would be approximately £21,000. In order to maintain their level of living in the face of record-high inflation and skyrocketing energy and other expenditures, seniors are researching ways to improve their income. So, Is equity release a good idea?

Is equity release a good idea?

If you live in a mortgaged property, the equity in it is the difference between the value of your home and the total of the mortgage and any loans secured on it. An equity release allows you to access the equity, or cash, that is tied up in your home.

You may be able to take the money as regular payments or a lump sum, and in some cases, a combination of both. Typically, you need to be at least 55 years old to be able to do this.

Nonetheless, there are a variety of schemes available. It is vital to get independent counsel on the optimal course of action to maximise benefits for individuals and couples.

The government exerts pressure on the elderly to downsize. This is unfair when they have committed many years to what they consider to be their “lifetime house”, however small it may be and filled with wonderful memories. Releasing equity can be a means of maintaining a property by enhancing its energy efficiency with insulation and window replacements to save operating costs.

Involving extended family in decision-making enables them to comprehend the financial ramifications faced by older couples and individuals. It also helps to agree on how any new cash should be spent and strategies to assist them in reducing day-to-day expenses for mutual gain. For instance, sharing a vehicle for the weekly grocery run or assisting with routine garden maintenance that would ordinarily necessitate hiring a professional.

The advisers at our trusted partners Premier Equity Release are sympathetic, prompting borrowers to openly describe their finances, without shame, in order to secure the best options for the future. To discuss your equity release options, contact us today.

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