Last Updated on Feb 18, 2020 by James W
Retirement is the time that we set aside for fulfilling our dreams that we have been unable to do during our working lives. Though we have the requisite time, our finances might not permit us. Not all of us are so prudent as to plan our savings from an early age. By the time they realize the importance of saving, it is already too late.
But, in today’s world nothing is too late for anything. You can secure your post-retirement expenditures even when you are at the verge of your retirement through equity release. For this all you need is a house that you own and it should be priced above £ 70,000 on which you have to release the equity.
What is Equity release?
Equity is the value of your house in the current market from which any outstanding debt is subtracted. When you release the equity on your home you get this amount either in installments or as a lump-sum amount.
What are the Requirements?
There are a few requirements that you need to fulfill to avail this opportunity. They are:
- You have to be at least 55 years of age
- You have to have a house that is priced at or above £ 70,000
- The outstanding amount of loan must be nil or very less
Who should go for them?
If you have an immediate requirement, like clearing an outstanding loan, then it is better if you go for the loan assistance schemes that the government provides. Equity release is for less essential expenditures.
Advantages:
There are numerous advantages of equity release UK schemes. Some of them are listed below
- Complete financial independence after retirement. You can even take care of the outstanding loans with the money that you receive through equity release.
- The amount that you receive through equity release is completely tax exempted. That is you get the entire amount without any deduction at your disposal.
- The Equity provider will auction off your house after the death of both you and your spouse. So, you do not have to worry about paying for the mortgage while you live.
Disadvantages:
There is one major disadvantage of an equity release scheme. It will diminish the value of inheritance after your decease. If that is something that matters a lot for your family then you should go for that equity release plan that will allow you to retrieve the house by paying the mortgage during your lifetime.
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