How Equity Release Can Help

Equity Release schemes have come a long way since their inception and apart from the typical reasons for equity release such as: –

  • Retirees reducing withdrawals from taxed pension funds, by accessing some of the capital tied up in their property tax free.
  • Those with interest only mortgages coming to an end, re-mortgaging.
  • Asset rich, cash poor people, that simply want to improve their lifestyle.
  • Providing additional purchase funds when moving home.

equityWe’re now seeing equity release schemes being used as tax efficient ‘family planning’ vehicles.

If the intention is for your children and maybe grandchildren to inherit, why not consider advancing some of that wealth now, perhaps when they need it most. The next generation may currently be faced with funding their children’s school / university fees or providing housing deposits / rent etc. They may also, as a result of such, have large mortgages as well as other loans or credit card debt at comparatively high interest rates, with no real prospect of repaying such so will roll them over until they eventually receive the inheritance.

Then there are the additional benefits that the equity release is tax free to the property owner and the loan is a debt against the estate for Inheritance Tax purposes. Thus, when viewed as an analysis of the cost vs benefits for the family’s combined financial situation, such schemes can be very efficient and challenge the usual mantra of ‘ Equity Release isn’t for me as I must leave the house to my children.’

The key fact is that releasing money in this manner and passing it onto loved ones at a time when they need it most could make much more sense than leaving it in a will many years from now. More and more people have found it incredibly rewarding to be able to help their children whilst still being around to witness it. Of course, equity release may not be an ideal solution for everybody and this highlights the need to seek expert guidance from a professionally qualified adviser that can offer whole of market products.

equityA very recent addition to what’s available are schemes for Buy 2 Let properties and 2nd homes, with potential Capital Gains Tax / Inheritance Tax advantages.

Robert Levy is an equity release specialist with The Right Equity Release. If you need any more information, please contact him on 07730 517671, email him at or visit