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INDEPENDENT FINANCIAL ADVICE CENTRE
You should remember that past performance is not necessarily a guide to the future. Market and currency movements may cause the value of units, and the value derived from them, to fall as well as rise and you may get back less than you invested when you decide to sell your units. The tax treatment of investments and pensions is not guaranteed and may change in the future.
Your home is at risk if you do not keep up the payments on a mortgage
This can be a useful way of reducing or eliminating the problem especially where extra cash could relief hardship.
You may raise capital on your home through either Equity Release or other mortgage schemes. There are two types of Equity Release schemes available, however, in our opinion only one is worth considering. The scheme we recommend in most cases is known as the Mortgage Scheme.
By taking out this type of plan, you are simply raising a mortgage on your property, a straightforward cash advance against the value of your home. You do with these funds as you wish, you do not have to repay any interest or capital back in your lifetime and the debt is added to your estate reducing your overall estate for Inheritance Tax purposes.
Of course the loan must be repaid, but this is all settled as part of your affairs after your death. In the event of you having to go into long-term care or a residential home you may be asked to settle the loan at this time.
The only decision you are left with is how you wish to spend your capital, you can of course spend it on yourself, (be careful not to buy anything that would increase the value of your estate). Alternatively, you can consider gifting or placing the funds raised in a Trust.
Main advantages
• To produce either a lump sum of money or income for life.
• Less of a burden, financial or otherwise, on you and your beneficiaries
• You do not have to consider moving home.
• To potentially reduce Inheritance Tax from day one.
There are many schemes on the market and it is essential that you obtain sound advice not only about the schemes but how they fit into your financial plans. You should consider all the “what happens if questions” for example, what happens if you want to move down market or if your partner pre-deceases you.
Contact us for more information.
Equity Release
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