Advice for Retiree

Archive for the month “May, 2013”

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.

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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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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.


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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 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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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.


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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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.

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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

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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

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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.


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.

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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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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.

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