Advice for Retiree

Fund your retirement with an Equity Release

We may not believe that money is the most important thing in life but we also cannot fully negate the fact that it is one of the most important things for all of us. People say money cannot buy everything but if we try to give a closer look into the fact then is there anything available in today’s life which money cannot buy? Am not talking about the emotional aspects here obviously, but the fact is that if you do not have money, you are not in the eligible stratum of the society. This is something which is a matter of deep thought among those who are going to retire soon. For them, retirement means the stoppage of a regular income and therefore the cut short of their day to day expenses. However, with the invention of equity release, retirement is not a matter of worry anymore.

Fund Your Retirement with Equity Release

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An equity release can be termed as a power booster for you if you have already thought that you will be lacking a lot after your retirement. Anybody of or above the age of 55 years will qualify for an equity release. However, it will further depend upon your gender as well as the value of your property. Being a resident of the UK, you will be able to choose from various equity release schemes. There are a number of online equity release sites which help various applicants to lead a worry free life after their retirement with some of their best options.

Lifetime Mortgage is one of the most commonly used schemes by the various applicants. This is nothing but similar to a standard mortgage where the property of the applicant is kept in advance and thereby securing a loan amount of its value. The value is repaid after the death of the applicant by selling the plot/property. If the applicant has the partner, then the amount will be repaid after his/her death or when he/she will be gone somewhere else forever. The best part of the lifetime mortgage is that you do not need to repay any amount till the time you are living. This is the mortgage for life and the money you get will be absolutely tax free and thus you can use the money any way you want.

Drawdown Lifetime plan is another scheme which has evolved greatly in the last 7 years or so. Here, the loan amount is given on the basis of the age of the applicant as well as the value of his/her property. The best thing about this scheme is that you can borrow the amount which you need immediately and then throughout your life you can keep borrowing small amounts but the amount which you need to repay will be calculated from the day it is loaned to you.

Home Reversion Plan is a bit different from the other two plans. It requires the applicants to sell their properties and a lump sum amount is given to them in return. This way the applicants get to live in their own home absolutely rent-free for the rest of their lives.

These above mentioned equity release schemes are very popular among a lot of UK retired adults. However, before you think about applying for your own equity release option, you should be well aware of the terms and conditions of the same. It is very much advisable to go through the site and you can also have a chat with the equity release experts. This way the whole process will become a lot easier for you.

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EPPARG initiating a new discussion to address financial challenges of seniors

According to the EPPARG a lot of new initiatives are now on cards to improve pension schemes for the elderly. As per news a discussion pertaining to simplifying pension schemes, has already been initiated by the European Pensions and Property Asset Release Group. The discussion took place between members who majorly include industry representatives, institutional stakeholders, representatives from the academic and charity sectors. Their main aim is to explore the prospective result based financial solutions which majorly include home equity release.

Finacial Challenges

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According to reports the discussion chiefly centered round issues such as the changes that have been implemented by EU institutions in an attempt to come up with improved financing plans. Steve Kyle, EPPARG’s Secretary General has further opined that a lot of financing institutions are conducting studies on equity release schemes and how conventional pension mechanisms were proving to be futile in meeting new challenges. With the aged population experiencing a rapid surge and the sluggish economy taking toll on the employment market, most people are turning towards equity release schemes.

The study has been conducted to highlight concerns pertaining to what the aged population has been receiving and the constraints they have been facing so far. Apart from such highlighted issues, the study also focuses on a whopping €20bn that is yet to be released on home equity release schemes. The amount will be released for another 10 more years in an attempt to respond to the creasing consumer requirements. These schemes have been majorly introduced to address current financial constraints faced by the elderly population.

These days, financing institutions have come up with home equity release schemes that comprise two major schemes, the first being a lifetime mortgage plan and the second being home reversion scheme. It has been found that an increasing number of seniors are actually heading towards the home reversion schemes because of its flexible offerings.

Equity Release to Fund Care and Other Day-To-Day Needs in Retirement

Inflation in UK has forced many pensioner households to cut down on other expenses. Due to rising cost of food, fuel and travel, over 55s find it tough to live debt-free. The leading financial institutions are worried about the future of the senior citizens.

According to a recent study by a leading insurer, the older population last year reduced their expenses on repaying debts. It has been revealed that they did so to keep up with the rising cost of essential commodities.

In terms of income, there has been increase of 13 percent in the retirement income over past three years. Senior citizens these days earn £1,412 against £1,250 they used to get before 3 years. But, in the meanwhile, if you take a look at unsecured debts, a whopping increase of 36 percent has been recorded.

Simultaneously, fuel and service costs that have sky-rocketed due to manifold increase in inflation rate escalating the worries of senior citizens. Because of all these factors, the cost of household essentials has sharply gone up.

Image Courtesy: bit.ly/oZ1smT

Image Courtesy: bit.ly/oZ1smT

In the present times, the future of senior citizens is looking bleak. With the pension income proving inefficient to keep up with the rising inflation rate, they are forced to mull over alternatives.

Equity release can be an answer to rising costs

Equity release proves as a saviour under such circumstances. The government has also recommended equity release for senior care and lifestyle improvement in retirement. However, senior citizens need to be made aware of the virtues of equity release and the differences it can bring in their retirement.

Misconceptions about equity release

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Image Courtesy: bit.ly/119zpi1

There are still some senior citizens who have similar types of misconceptions about this scheme. The financial advisers report this; clients raise a few questions while discussing equity release matter with them.

Equity release market persists with the hard work to educate and update the common people and particularly those are nearing retirement or already in retirement about the different equity release products. It is suggested to them that under what circumstances equity release can be taken and how it will positively impact their post-retirement lifestyle.

Most people are apprehensive about the inheritance. They suppose equity release will negate even slight chances of leaving inheritance for their children while some are under the misconception that they might lose their house by taking out any equity release product.

Somewhere around 25 percent of financial advisers have to say that most consumers are unaware that equity release guarantees no negative equity on house. Oftentimes, financial advisers have to clarify such doubts from the prospective customers.

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In a nutshell, it is the need of house to guide prospective equity release customers and let them know the facts of equity release scheme.

Clarify Your Doubts before Signing Up For Equity Release

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image courtesy: goo.gl/p8m2X

 Nothing comes with a 100 percent assurance unless you have verified the authenticity of a product. Such a notion is even applicable for equity release plans that are designed to benefit the senior community at large. Despite, being known as one of the most reliable and effective financing solutions of recent times equity release entails a prospective borrower to seek financial advice before a person signs up an application form.

There are certain questions that will typically arise when a person moves ahead to seek an equity release scheme. On clarifying such questions a consumer can proceed towards the right route. Most often people who are not wholly familiar with such kinds of financial schemes may ask more about the operating procedures of equity release and how they actually assist in solving financial problems.

Equity release unties the wealth tied to a property. These financing schemes can either release the whole value of a house or part of it either in installments or in lump sum.

Can a person, release equity on his property even after he has not paid the dues of his previous mortgage? Equity release schemes don’t allow a person to unlock the cash worth of his property if he has not yet paid his dues of a previous mortgage. The consumer will only be allowed to release cash after he settles his dues in full.

If your mind questions you as to “why should I release equity?” you can straight away look for financial advice from an authorized site dealing with equity release and its offerings. Furthermore, you may think if these financing schemes are best suited for your set of needs, or not. It is quite obvious if a person enquires on whether a particular scheme will appropriately tailor his needs. Most importantly, before a consumer opts for equity release, he has to ascertain the other options that are available. Since it is considered a lifetime commitment, consumers are recommended to consider the pros and cons entailed in such kind of financing schemes.

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Image Courtesy: goo.gl/pS9Ex

A lot of people think that these financing solutions are mostly rigid in nature. On the contrary there are also schemes offering flexible solutions to retired consumers who need instant financing solutions. No matter how complex a person’s financial need may be, there are long term financing plans under equity release that are meant to fit around the varying requirements of borrowers. In order to choose a perfect plan, people nowadays seek advice from authorized financial experts.

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Overcome Financial Worries Post Retirement with Equity Release

The abundance of the equity release products is regarded to be the most effective solution provider. If you wish to go for it you will need to go through certain criteria.

Your Home: Your Saviour

Your home can save you. Yes, it is true. If you do not have a great pension in your post retirement years then it will be difficult to make your ends meet. If you are a homeowner and an individual over the age of 55 years then you are eligible for equity release. Equity release plans are said to make every senior citizen financially happy. The equity release plans are especially designed for individuals above the age of 55 years. Equity release is the most reliable and one of the safest options that one can get in his post retired life to make financial conditions a lot better.

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Image Courtesy: bit.ly/xFbbrJ

Equity Release Plans For 55 +

Throughout the United Kingdom home owners above the age of 55 are going for the viability of using equity release plans to raise the much needed cash. Equity release plans are extremely versatile. This is because the money that is being freed can be spent on just about anything. Two of the most popular equity release plans are home reversion plans and lifetime mortgages. To be eligible for these and the rest of the plans you need to be over 55 years of age as well. These are one of the most innovative ways to free up cash. It is also easy to find out whether you can qualify for an equity release plan through an equity release calculator. You need not have to leave the premises of your house in your lifetime if you apply for the equity release plans.

image courtesy: goo.gl/wr7g7

image courtesy: goo.gl/wr7g7

Modes of Payment

The payments that are received from the equity release plans can be primarily obtained in two modes. These two modes are lump sum amount or equal monthly instalment modes. Financial advisors however advise that you go for the latter. Going for the equity release schemes are one of the major decisions that one has to take about his post retirement life. It therefore is always advised to talk to your equity release guide before you make the plans.

Therefore, if you are more than 55 years and own a home in good condition by your name in UK then you can go for equity release. It is highly advantageous for individuals to go for the equity release plans to say goodbye to financial worries post retirement.

Equity Release to Offer Wishful Lifestyle to the Older People

image courtesy: http://goo.gl/4dweX

image courtesy: goo.gl/4dweX

Equity release advisers have to talk to lots of older clients facing financial adversity in later years of life. Most of the older people are left with many years of life and unwilling to relinquish the lifestyle they are used to.

Some of the people have taken annuities and gain retirement income from it. But, as the fixed annuity terms ends, they are again left on own. It causes a drastic fall in their retirement income.

Equity release advisers have to deal with many such cases. There could be another condition when the couple has used up entire retirement income and virtually left with nothing to depend for rest of their life. It forces them to severely curtail their lifestyle.

But they are not ready to accept any kind of changes in their lifestyle and way of living. Going on a cruise, shopping and other things have become part and parcel of their life and no matter what it can’t be detached from their lifestyle. Many senior citizens are even ready to pay up to £5,000 per year on cruise holidays.

It’s typical to notice that after supporting children financially throughout their life and having worked hard for entire life, a septuagenarian couple will take coming years as their time. They want to live these years at the fullest.

Most couples have certain medical conditions as well. The biggest worry for them is to find the resources to fund their lifestyle as well as medical bills.

Solution Lies with Equity Release

image courtesy: goo.gl/wG2jR

image courtesy: goo.gl/wG2jR

Under such precarious circumstances, they can be offered equity release solutions. Most couples own the houses having greater value in long term. It’s a surety that these houses have added lots of equity over the years. But some of them have interest only mortgages, about to attain maturity in recent future.

Equity release could provide all the solutions, whether it’s about lifestyle maintenance, footing medical bills or repaying existing mortgages.

Suppose a couple owns a house that worth £325,000 but they also have an interest-only loan of £30,324. They need to repay £125 per month and the loan is on the verge of maturity in couple of years.

If they take drawdown lifetime mortgage at 33 percent valuation rate, they can repay the mortgage and still left with £77,000 that can be withdrawn as and when they need the money.

If they opt for rolled up lifetime mortgage, additional expenditure of £125 can be saved and they will have a lesser deficit to add up to.

However, it’s natural and obvious for them to consider other alternatives, such as downsizing and renting the room, as well.

As a whole, equity release is not only about managing the income shortfall but also the comfort and luxury of life in your best years.

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Living Life King Size in Retirement with Equity Release Scheme

Retirement comes with many promises. It is rightly said as golden phase in the life of a person. Out from the usually hectic routine life, people have lots of opportunities to live on own terms and conditions in retirement. They have all the time to spend with family and friends, attend clubs and go on lunch dates. While some prefer to spend time on the pool lounges reading latest novels, rest of the retirees look after gardens and harvest vegetables in the backyard of their houses.

Image Courtesy: goo.gl/lkxH5

Image Courtesy: goo.gl/lkxH5

Here are few ways to plan out a comfortable retirement:

Know yourself: Most retirees find it tough to come with the terms of newly acquired comfort. Either they find themselves in distress or spend lots of time alone. If you are a workaholic, securing a part time job or volunteering for social causes can be a right choice for you. You have a choice to become consultant to the company you are working in. This will not only provide you extra income but also make your life stress-free.

Engage yourself: After a certain point, retirement life becomes mundane and boring to most retirees. As they are now cut off from their colleagues and friends at working place, life may not remain exciting and entertaining to them. You need to re-schedule your daily life at the earliest to live life afresh. Plan out dates with friends and go out on adventures from time to time.

Enlist everything that appeals you: Clip articles, save brochures, collect photographs and everything that appeal you. This will give you some work, whenever you are free.

Reinvigorate your skills: Every human being is gifted with something unique; you can exploit your creativity in the retirement. A creative writer can start putting their words together and write a book or fictions. If you possess leadership skills, apply this facet of yours in invoking positive thoughts in the mind of youths in your locality, or you can join any organisation.

Keep learning: Learning is a process that never ends. You should always try to acquire new knowledge and information on the things that interest you. Go through non-fiction books, read newspapers and magazines as much as you can.

Rehearse the retirement: It may work for you in the long run as well short run. You should practice the retirement, well before hanging your boots.

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Image Courtesy: goo.gl/YDwx8

Living life king size in retirement is possible only with constant flow of income. For your dream retirement, you need to make certain sacrifices in the working years and if you have not, do not feel low.

You have an option for retirement planning with equity release scheme. Yes, this plan is exclusively designed for retirees and offers several benefits to them. You can fulfil all the above mentioned dreams of yours by withdrawing equity from your house.

How to Plan a Rich Early-retirement?

Different people take retirement differently and plan their retirement on different stage of life. Planning a retirement needs proper attention and if someone plans out an early retirement, they must not mind putting some extra effort. One might wish to retire at 45 whereas most people mull on this issue after 55 or 60 years of age.

Under today’s economic growth, higher salaries and various investment choices have resulted into too many early retirements. It’s entirely your choice to retire at 40 or 60 years of age but retirement at both the stages are different to each other and have their pros and cons.

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Image Courtesy: goo.gl/pS9Ex

At the age of 40, you might have several commitments to fulfil and moreover, you have lesser time for accumulating retirement savings. On the other hand, it will give you a chosen lifestyle.

Retirement at 60, in most cases, is obligatory under the policies laid out by most companies.

Here are few basics for early retirement and how you can make your retirement rich in financial terms.

Consider a retirement age: This is the first and foremost step in planning an early retirement, as you will get a fair idea on savings pattern.

Life expectancy: Estimate how many years you are going to live post retirement, though it may sound difficult but by doing so, you can have an idea on the size of corpus.

What retirement meant for you: Two different persons will want to enjoy their retirement in different ways. If one plans early retirement to pursue other dreams, other may choose it for the world tour. As living two entirely different dreams varies on expenditure, you will need to mull on retirement plans that are poles apart to each other.

Now you will have a complete idea on how much savings you are going to need in your retirement. Here are a few steps that will help you in retirement savings.

Start early: If you are planning an early retirement, no way you can afford to start savings latter. Make sure to start your action as soon as income starts flowing in. Ensure that your contributions are without any gap, as this may prove burdensome to re-start after a gap.

Start small: There is no need to invest once in a big chunk, you must start savings early, even if it means small contributions. Your small contributions will one day return into big pension pot.

Increase the size of investment: Starting small does not mean you should get stick with it forever. Your savings must be proportionate with the income; it means that when your income is up, contribution, too, should be higher. Make a goal and work accordingly.

Wise investments: While making investments, you must look to balance the risk and return factors. In the early years of working life, invest in equity and later modify it for balancing debt instruments.

Buy a house: A house gives stability to your life. Make sure to buy a house, does not matter whether it is small or big. It will also help you in the later years to withdraw equity in the form of equity release scheme from the house.

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Image Courtesy: goo.gl/LyA6r

An early retirement can offer a chosen lifestyle and help in pursuing your dreams, but to have a successful early retirement, you must chalk out plans and stick to it for the entire working life.

Lagging Behind in Pension Contribution? Equity release can be a Worthy Alternative

At the ripe age of 50, you are at the peak of your earnings and ten to fifteen years away from retirement. Almost all the major expenses probably are behind you or about to wind up. This is the time, when you should give a serious thought on your retirement plans. Do some number crunching and start making contributions vigorously, as if there is no another day.

Venturing into this age group means a final opportunity to plan out retirement. This decade is quite important in a person’s life. Once you go into 60, you will not have enough time for planning.

Image Courtesy: goo.gl/P7Xdo

Image Courtesy: goo.gl/P7Xdo

Most mortgages will be nearing their end point or fall into affordable range. The workplace studies show that 50s is the highest point of career earning-wise.

Basically, people in 50s are divided into two major groups

  • The first group comprises of those people, who are evaluating their retirement plan to find out whether it is still working or not. You need to calculate everything and take a decision if aggressive contribution is needed.
  • They who put off from the retirement plans due to any reason fall into second group. As you have ventured into 50s, so there is a high chance that your liabilities are shortened. You should start a speedy recovery now.

If you fall into second group, you should be ready for some financial sacrifices to achieve set parameter for happy retirement.

By the age of 50 years, it’s expected that you have a fair idea on the comfortable retirement. At this age, several other commitments, apart from mortgage repayments, are most likely to have got fulfilled.

Consolidate small plans

You must have worked for several employer during all these years and most likely to have some smaller plans. Now you should consolidate all the plans, as you will get a clear picture on the savings.

It’s easier these days to transfer one retirement account into another, so if you have IRA or 401 (k) plans, request the concerned authorities to merge them together.

Equity release is an alternate retirement plan

If you are lagging behind in retirement savings and by no means can you play catch up with it, you can release equity to plan your retirement. Equity release scheme these days is an ideal option for them, who have been left behind in savings approach.

This plan has several prospects in your retirement years. The biggest advantages offered to you are right to retain ownership of your house and no requirement of monthly interest repayment.

Image Courtesy: goo.gl/tGVJT

Image Courtesy: goo.gl/tGVJT

You can trust equity release for a happy retirement. New rules and regulations in place are efficient enough to safeguard your interests.

Amid Pension Rules’ Acceleration, Equity Release Remains a Driving Force

image courtesy: http://goo.gl/8gb6z

image courtesy: http://goo.gl/8gb6z

According to a study published by European Insurance and Occupational Pensions Authority (EIOPA), the new Pan-Europe pension deficits calculation rules can bring £150 billion funds in UK. This fund will be used to meet targets of defined benefit pension schemes in the country.

In yet another announcement, Chancellor George Osborne has emphasised on the government’s commitment to speed up new and simple pension overtures. According to Osborne, critic-centred cap on social care cost is also set to introduce almost at the same time.

Single-tier pension plan and cap on social care cost is set to launch a year earlier

The UK government has decided to bring single-tier pension scheme a year earlier than the due date was announced previously. Talking benefits of this plan, Osborne has declared that single-tier pension plan will come into effect from 2016, it was set to launch, before, in 2017.

Cap on social care cost is also to be introduced at the same, though the cap has been reduced from £75,000 to £72,000.

Osborne was forthright in saying that one requires paying up £72,000 only once and state will bear the care cost of senior citizens for rest of life.

To level pension disparity, single-tier pension plan is set to introduce at £144 per week. The Chancellor was up-front with praises for this “generous” pension scheme and claimed it as a massive boost for retirees keen on retirement savings.

However, it’s to be seen how new pension plan and social care cap fares in future. For most retirees, accumulating huge sum of social care cost will be a challenge. But, certainly, it’s not end of the road for them, as equity release can help retirees recover from challenges and to pay up the care cost.

House of Lords committee suggests equity release as effective retirement solution

A House of Lords committee had a few weeks earlier, recommended equity release as an effective solution to sort out poverty issue from the life of pensioners. This committee has also suggested government to chalk out strategies and spread awareness, about equity release, amongst the citizens of UK. (News source: http://goo.gl/cOMi4)

With several virtues, equity release scheme offers UK citizens to withdraw equity from their houses in cash lump sum or as monthly income. Unlike other mortgage plans, equity release customers can retain the ownership right and live in the house for entire life span.

Equity release offers countless benefits to customers, one of the most interesting and beneficial facets of this scheme is that paying back equity release mortgage, prior to your death or decision to move out from house, does not amount to any penalties.

It’s because of such time and means tested benefits that equity release has constantly been up on the minds of retired citizens in UK. Equity release market is functioning with all the new hopes, acquired from the last year’s huge success, to parity the income gains in the life of retired UK citizens.

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