Before you take any steps, it's vital you get expert advice for your situation.
Age Concern, the Financial Services Authority and many providers themselves recommend using an independent financial adviser (IFA) to help you decide if equity release is really the best option for you. Visit www.unbiased.co.uk or ring 0800 085 3250 to find details of local IFAs. Make it clear you want advice, not just information.
* Is the equity release provider registered with SHIP and the FSA?
* Does the scheme allow you to move house if you need to?
* How much will the deal cost you over its lifetime? Pay attention to the annual percent age rate not just the headline rate and ask about fees, charges and any early repayment costs.
* Is your family in favour? Whilst equity release plans can be a good way of cutting inheritance tax bills, they will also reduce what your family will inherit. Whilst it’s ultimately your decision, it’s probably a good idea to discuss it with close family members to avoid any misunderstandings.
* What happens if you are living with a younger partner, relative or friend?
* Will you lose any means tested state benefits?
* Will you have to pay any extra tax? The money released is tax free but if the cash is then invested there may be tax to pay on any income or growth.
* Could you move to a smaller house? Capital raised this way will cost you less in moving expenses than in equity release-set up charges and interest.
* Are you are entitled to extra state benefits or local authority grants for home improvements? (For advice, contact your local Citizens Advice or ring Help the Aged (0808 800 6565) or Age Concern (0800 00 99 66).
* Could you use your savings or sell any investments to boost your income?
These are where companies offer to buy your home for cash, at a big discount, and rent it back to you - are not the same as equity release scheme and are not regulated by the Financial Services Authority. There is growing concern about the number of unscrupulous operators in this market. The National Association of Sale and Rent Back (NASARB) and The Property Buyers Association (PROBAS) have devised voluntary codes of practice that they hope will protect the consumer and stave off intervention by the Office of Fair Trading. But the message is be very, very cautious before signing up to a company offering one of these schemes.
* Ring 0845 606 1234 for a leaflet Just the facts about equity release schemes from The Financial Services Authority.
* For Age Concern’s factsheet Raising income or capital from your home ring 0800 009966.
*For equity release providers that belong to Safe Home Income Plans (SHIP) ring 0870 241 6060 or visit www.ship-ltd.org.
*Download Financial Freedom in Retirement leaflet at www.keyrs.co.uk.
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