- image courtesy: http://goo.gl/g46Qu
The properties’ value in UK is on a rapid rise. A large number of Brits have significant value tied up in their properties. On the other hand, insufficient pension pot is inadequate to meet the basic standards of post retirement life. For them, who bank upon pension pot to live a comfortable life, it’s proving a nightmare.
It’s no surprise to see such a huge response to equity release scheme, the dastardly economic effects are compelling homeowners to draw out money from their properties. Into the last year, 2012, equity release market plunged forward, accomplishing new heights in the industry.
The governing body in equity release market, SHIP, is on the cloud nine by seeing a huge response from older homeowners. The growing needs amongst retirees and awareness about various plans under equity release are the causes behind such a huge uproar for this scheme.
Poor savings and insufficient investment returns have drenched retirees’ standard of living, economic slowdown is adding to their woes. With high inflation rates on all the essential commodities, living a substantial post retirement life is becoming impossible for many retired persons in UK.
Equity release can provide them all what they have ever dreamt of. With lowered interest rate and various flexible plans, equity release market has come of age and being driven by faith from customers.
However, like every coin has two sides, equity release, too, is having some positives and negatives. But, its virtues have the abilities to overlap negatives, which are only a few. In spite of some negative consequences, equity release scheme is far better than several interest only loans. One must not be in dubious mind, release equity on house and fund your retirement to start financially secured life afresh.
Let’s talk of some pros and cons, start with virtues of equity release scheme:
image courtesy: http://goo.gl/7nyNG
- Tax free lump sum or monthly income
- Usually, there is no requirement of monthly repayments
- Spend the money as per your wishes
- Full ownership of house for lifetime
- No negative equity is guaranteed
- Debts are not passed on to your family
- Possibility to leave inheritance for dependants
- Estate value might get reduced
- Entitlement to state funded benefits might be affected
- If you opt for a wrong plan, interest rates might be higher
Do not get driven by some of the negative aspects of equity release. Well, suppose, your estate value gets reduced but that is not sufficient to curtail you from living a comfortable life. If you have no heir or you do not intend to leave an inheritance, what your house is worth for after your death?
With the released money, you can fund your basic needs, as the money received is so high. It’s important to seek experts’ advice as they can provide you exact information on various equity release schemes and which one is best suited to you.