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Equity Release for Improving Standard of Living

Mr and Mrs Smith had retired 10 years ago and, although they had managed to maintain their standard of living initially, they were now starting to find that their pension was just not going as far as it used to. They had spoken with their children who had told them that they had worked really hard throughout their life and they should be able to enjoy their retirement. The children would have liked to help, but both now had children of their own and so just did not have extra money to give away.

Mr and Mrs Smith approached an equity release adviser about their situation and he told them that they could arrange for an equity release plan to provide a monthly income, which they could add to their current income. The adviser did make them aware, however, that this income would again be a fixed income, so as prices rose, they may eventually find themselves in the same situation as they were currently in.

The adviser talked them through the other options available to them and, following a detailed discussion about their situation, recommended using a lifetime mortgage with a reserve facility. They could take an initial lump sum to tide them over and leave the remaining funds in an interest free reserve facility that they could use as and when required. Using this method meant that Mr and Mrs Smith could maintain their standard of living as prices increased in the future.

Equity release may involve either a lifetime mortgage or home reversion plan. To understand the features and risks, ask for a personalised illustration.