What is equity release?
Equity release enables you to unlock a proportion of the value of your property without having to move home, to release for a tax free lump sum and yours to spend however you choose.
The total amount owed is repaid when the plan comes to an end, usually when you pass away or move in to long-term care.
You do not need to make any monthly repayments with an equity release plan (although should you choose, there are plans in place for you to make payments) the interest on the amount you release will roll up and add to the sum of the loan over the life of your plan.
Once the property is sold, the sale proceeds are used to repay the money owed to the provider of your plan. Any money remaining will be paid to you (in the event you have moved into long-term care) or your beneficiaries.
How safe is equity release?
Over the last twenty years, Equity Release regulations have changed significantly. Equity release plans today are now fully regulated by the Financial Conduct Authority (FCA) to ensure you, the customer and your financial future are protected. Your home may be at risk if you do not take out a plan that has been endorsed but the Equity Release Council or one that offers the same guarantee. Doing so will guarantee your home ownership is safeguarded for life (or until circumstances change) providing it remains in your possession.
The Equity Release Council offer further guarantees that serve to protect the customer. Your Bower Private Clients adviser, will only recommend Equity Release products that have been endorsed by the Equity Release Council so you can trust they are safe.
What are Equity Release Council equity Release plans?
The Equity Release Standards Board exists to ensure that equity release plans are reliable and safe for customers. Members of the ERC are able to guarantee their customers have been offered best practice products and services and are fully informed and increasingly protected.
Bower Retirement is a member of the Equity Release Council and only recommends Equity Release Council equity release plans, or those with the same guarantees.
These guarantees include;
- No negative equity – you or your family will never owe more than the value of your home
- You retain the right to remain in your home for life providing you keep to the terms and conditions of the plan and it remains your main residence
- No debt will be left to your loved ones
- You can move to another suitable property (subject to lender criteria)
- You retain the right to seek independent legal advice from an equity release solicitor of your choice
Am I eligible for equity release?
To be eligible for equity release you will need to be over 55 (youngest age if a couple) and own your own home in the UK. The value of the property is valued at or greater than £70,000. The property should be in the UK (including Northern Ireland); must be your main residence, be of standard construction and in good condition.
To be eligible for our Private Client Service, your property must be greater than £1 million or the release over £300,000 (whichever is less). If you are unsure, please contact us and we will be able to assist you. To release money from your property with an equity release plan, you must be able to release enough equity to fully pay off any outstanding mortgage or secured loan, or have enough funds by other means to do this. Any money that remains after this is yours to spend however you choose.
What are the alternatives to equity release?
You should consider a number of alternative options that are available to you before taking out an equity release plan;
- Utilizing other investments or assets you may have access to
- Downsizing your property or moving to a less affluent area of the country (Moving & agency costs will need to be considered alongside this option)
- Continuing or returning to work to top up your regular income
- Sub-letting a room in your house to a tenant
- Arranging a traditional mortgage
- Ensuring you are receiving all means tested benefits that you are entitled to. Your Bower Private Client adviser will be able to check this for you as part of our service
- Accepting financial support from a friend or relative
Why take independent equity release advice?
Being an independent firm means that your adviser will explore the whole of market, allowing access to a much wider variety of options and interest rates to ensure the best plan is found that matches your requirements.
Your Bower adviser will be able to objectively explain all the advantages and disadvantages of each plan, and not pressure you into making a decision. They can tell you if the equity release plan isn’t the right option for your right now and offer alternatives you may wish to consider.
Not all equity release providers will deal directly with the public, so your independent Bower specialist can access money-saving offers and exclusive deals that you couldn’t get if you went directly to the provider.
As part of the Bower Promise we will deliver independent tailored financial excellence and be with you every step of the way.
What areas of the UK do you cover?
Bower has a national team of dedicated Private Client advisers covering England, Scotland, Wales and Northern Ireland.
Wherever you live in the UK, we want to offer you a free, no-obligation appointment in the comfort of your own home, with one of our friendly specialist Private client advisers. You can spend as much time as you need asking questions, discussing alternatives and making sure equity release is the right option for you. We encourage you to invite your family or friends along to the meetings who can ask questions of their own and offer you support in your decisions.
As part of the Bower Promise we want to assure you that wherever you live in the UK, we will be with you every step of your equity release journey, delivering top quality advice and support from the outset.