Advice for Retiree

Archive for the tag “equity release scheme”

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.


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.

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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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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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.

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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.

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

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