A recent article dated 28 May 2019 in money week.com informed readers that the charity Age UK is apparently making money by directing people to a particular equity release advice service which is weighted towards products offered by that advice service’s own parent company.
So, what is equity release and why would Age UK be involved?
Equity release is becoming increasingly popular as it allows people who are aged 55 and over who need capital to stay in their own home but release capital from it or a steady stream of income against the capital. The sum must be repaid at a later stage when the last legal owner dies or goes into long term care. You may wish to use equity release, for example, to fund your lifestyle, reduce the value of your home for inheritance tax purposes, fund home improvements or help your children financially. The Equity Release Council has stated that loans worth a record £935 million were taken out in the first three months of 2019.
If you wish to take out an equity release product, the first step is to take independent financial advice from an independent financial adviser. The adviser will go through the financial implications and associated costs of equity release products with you to see if equity release is suitable for your needs and, if so, you will need to decide on the right product for you. In some cases equity release is not suitable and other recommendations for your circumstances will be provided.
If you proceed and have decided on a product you will be required to take legal advice on the terms of the equity release and for a specialist solicitor to deal with the legal documentation before obtaining the funds. Waldrons Solicitors are able to advise fully on the legal implications and legal risks of equity release so you can comprehensively decide before the funds are requested that it is ultimately the right choice for you. The legal costs are separate from the costs of the financial adviser and the provider’s fees.
In summary, it is very important that you have made the decision to have equity release after going through all options that are available to you and that you have chosen a product that meets your needs. A reputable provider will offer a no-negative equity guarantee. This means you or your estate should never have to pay back more than the value of your property. Be aware of this and ensure that this is stipulated in any offer that you receive.
Head of the Private Client Department, Merry Hill and Walsall