As well as equity release, there are other products, typically covered by a term called later life financial products that like equity release are dedicated for people in older age brackets and who are homeowners that you may wish to explore.
These include products such as retirement mortgages and retirement interest-only (RIO) mortgages. It is recommended that you speak to your adviser and seek information on all options to ensure any product you choose best suits your needs, both now and in the future.
You can find an adviser by looking on the Equity Release Council’s ‘find a member’ section. Council members often advise on the full suite of options, not just equity release. However, if they do not, they will always refer a customer on to a specialist adviser, if they think there could be a better option for them to explore elsewhere.
What else should customers consider?
Before taking out an equity release plan or other lending product, you should check other financial affairs and options. For instance, you may have other investments, savings, or assets to draw on, or you may wish to continue some form of paid employment. You could downsize to a smaller property or one of lower value – perhaps by moving to a different part of the UK where house prices are cheaper.
You may also want to think about renting out a room in your home or taking a loan from family and/ or friends. Should you need information on managing debt, you could also visit stepchange.org or moneyadviceservice.org.uk/debt
I’m interested in equity release, what do I need to consider?
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Always look out for the Equity Release Council member endorsement mark when seeking advice on equity release to ensure you are dealing with a Council member. Look out for our logo on their literature and check the ‘find a member’ section on our website.
The Council promotes very high standards of conduct and practice in the provision of advice on equity release and to the characteristics of products. Specifically, customers of Equity Release Council members enjoy three levels of protection, encompassing a structured financial advice process, the requirement and the right to independent face-to-face legal advice and product safeguards including but not limited to security of tenure and a no negative equity guarantee.
The equity release protections you can expect from Council members
– For lifetime mortgages, interest rates must be fixed or, if they are variable, there must be a cap (upper limit) which is fixed for the life of the loan.
– You must have the right to remain in your property for life or until you need to move into long-term care, provided the property remains your main residence and you abide by the terms and conditions of your contract.
– You have the right to move to another property as long as certain criteria are met, such as new property being acceptable to your product provider as continuing security for your equity release loan.
– The product must have a no negative equity guarantee. This means that when your property is sold, and agents’ and solicitors’ fees have been paid, even if the amount left is not enough to repay the outstanding loan, plus interest, to your provider, neither you nor your estate will be liable to pay any more.
– Our members are only allowed to tell you that a product meets these standards if it meets all of them. If you are offered or are considering a product that does not meet all the standards, the product literature must explain which standards are not met and give an illustration of the types of risk that this might pose for you.
Download our full equity release guide here
It is important to take professional advice before making any decision relating to your personal finances. Information within this page is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK.
Equity release will reduce the value of your estate and can affect your eligibility for means tested benefits.
Tax and Estate planning are not regulated by the Financial Conduct Authority
The value of pensions and investments can fall as well as rise. You may get back less than you invested.
Will writing is not regulated by the Financial Conduct Authority.
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