About the Author

Dan Osman

Head of Later Life at UK Moneyman Ltd.

Dan joined the Financial Services sector back in 2002, but actually left the industry in 2008 before returning some years later. During the in-between years, he took a degree to become a Social Worker specialising in working with vulnerable adults.

Upon his return, Dan combined his experiences in the two sectors to become an Equity Release Specialist and he now heads up UK Moneyman’s Later Life Lending proposition. He genuinely believes in a holistic approach and always ensures his clients receive a proper consideration of all the options available, including non-lending alternatives to Equity Release.

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What is Equity Release?

Equity release is a financial product designed for homeowners who are aged 55+. Equity release allows our clients to access the money tied up in their property while continuing to live in it.

As you approach retirement, you may find yourself considering your financial options. Equity release can be used for various reasons, examples can be found below:

A List of Equity Release Reasons

Supplement pension income.
Repay a mortgage.
Divorce settlements.
Tax bill.
Clear debts, loans, and credit cards.
Paying for care.
Gifts to family members.
Buying a new property.
A big purchase such as a boat or car.
and many more…

How Much Can I Release?

The amount of money that you can release from an equity release scheme will be based on a few factors such as how old you are, your health, whether you have a partner and the value of your property. The amount will also vary by lender so seeking good quality advice is vital.

Equity Release Types

There are two main forms of equity release product available, a lifetime mortgage and a home reversion plan.

A Lifetime Mortgage (Type 1)

A lifetime mortgage is the most popular type of equity release plan.  You can choose to take tax-free money out of your home, either as a lump sum or in small chunks as and when required.    

With a lifetime mortgage, you’ll retain full ownership of your home.  Lifetime mortgages are flexible, you can choose to pay monthly interest payments, just like a regular mortgage, or make no payments and let the interest roll up.  

Seeking good advice is important, we come across situations on a regular basis where clients have received bad advice or advice which has been restricted.  

A Home Reversion Plan (Type 2)

A Home reversion plan is less common type of equity release scheme.  With a home reversion plan, you sell all of part of the property at less than its market value in return for a tax-free lump sum.   

The lump sum of cash can then be used to fund long term care if you are looking to stay in your home.  

Home reversion plans are rarely recommended as the best way forward; however, they are suitable for the right applicant.  

The Benefits of Equity Release

Supplement retirement income: One of the key benefits of equity release is the ability to supplement your retirement income. Many of our clients find that their pension savings are insufficient to maintain their desired lifestyle. Equity release can offer a valuable source of funds, allowing you to cover living expenses, travel, or indulge in hobbies and interests.
No monthly repayments: Unlike traditional mortgages or loans, with equity release schemes you can choose whether to make monthly repayments or not. If no repayments are made, the loan and interest are repaid when the property is sold, usually after you pass away or move into long-term care. This can alleviate financial stress and provide peace of mind in your retirement years.
Bad credit/low credit score: No problem. Unlike regular mortgage products, equity release schemes do not follow the same approval process as your home is used for security. Therefore, clients that have a low credit scores for one reason or another, stand a very high change of being accepted.
Retain ownership and stay in your home: Equity release enables you to remain in your home for as long as you wish, without having to downsize or move into alternative accommodation. This can be particularly appealing if you have an emotional attachment to your property or wish to leave it as an inheritance for your loved ones.
Tax-free funds: The cash you release from your property through equity release is generally tax-free, making it a highly efficient way to access your wealth. It’s important to note that the money released may affect your eligibility for means-tested benefits, so it’s advisable to seek professional equity release advice to understand the potential impact.

Also, you can also choose to take the money as a lump sum or in smaller chunks as and when required, saving you interest. A good later life advisor will guide and recommend the best way forward for you based on your plans.

Important Considerations

While equity release can be a useful financial tool for many clients, it’s important to consider the following aspects before deciding:

Impact on inheritance: Equity release reduces the value of your estate, which can affect the inheritance you leave behind for your loved ones. We find it works best involving your family members in the discussions from the outset if you are considering equity release.
Long-term commitment: Equity release is a long-term commitment that can impact your financial situation for years to come. Therefore, it’s essential to consider your future needs, potential healthcare costs, and any unforeseen circumstances that may arise. All other later life lending products such as a regular mortgage, a retirement interest only mortgage (RIO) and hybrid products should be considered by your later life mortgage advisor prior to an equity release recommendation.
Limited or poor advice: It is important to check that your later life mortgage advisor is providing advice on the full range of later life lending solutions and is independent. Often, the morning television adverts only talk about taking equity release and not about the full range of mortgage products that are available to clients aged 55+. We are proud to be one of a small number of companies in the UK able to advise on the full range and be independent.

Book a Free, No-Obligation Consultation! 

If you feel ready to take the next step with us, we’d love to hear from you. You can telephone or book online to arrange a free, no-obligation consultation where we can discuss your later life mortgage options. 

We’ll answer all your questions and recommend a way forward. We don’t need anything in the call other than your ages and your address. 

Evening calls are available to fit around any work or family commitments also. 