'Equity' is the term given to what your home is worth after allowing for debts such as mortgage loans that have been secured on it. Equity Release allows you to convert some of the equity to cash in your hands without you having to sell up and move out.

Home Reversion Plans

A Home Reversion plan is where you sell your home or a percentage of it to a Reversion company but retain the rights to live in it rent-free for the rest of your life.

The money received can either be paid out in a cash lump sum, a monthly income, or a combination of the two.

The reversion company is unable to sell the property until both you and your spouse are dead or you decide to move into long term care. This means that you will not receive the full market value for your property as the Reversion company might have to wait 10, 20 or even 30 years before they can sell the property and make a profit.

The payout's range between about 20% - 60% of a property's value and depend on many factors, the main one being the
age of you and your partner

The older you are the more of a percentage you'll receive and vice versa

This is common sense as collectively 65 year olds have a longer life expectancy than those aged 80.

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Lifetime Plans

Lifetime Plans are currently the most popular type of equity release scheme. The information below is an overview including the advantages & disadvantages.

These plans enable you to raise a lump sum at an fixed interest rate, which is then added to the loan. They are also known as ‘roll-up’ schemes. You have no monthly payments to make & there is the security of the 100% ownership of your home.You have the right to remain in the property for the rest of your lives and the plan is repaid when the property is sold, which usually occurs when you die or enter long term care.

Advantages
Plans are available from age 55 to age 95
You will benefit fully from any future increase in property value
Option of fixed interest rates for the lifetime of the plan
Flexibility of borrowing additional funds in the future
Optional guarantees to protect a portion of your estate for your family

Disadvantages
The Lifetime plans balance will compound over time
Your tax position and eligibility for means-tested benefits may be affected
A lifetime plan usually cannot raise as much as a reversion plan
Early repayment charges may apply
Your beneficiaries may receive a reduced inheritance


These are lifetime plans and home reversion plans. To understand their features and risks, ask for
a personalised illustration.