Bridge the Pension Gap With an Equity Release Plan

With equity release, you can unlock some of the capital from you home – a little bit like taking out another mortgage on it, but without having to pay it back. You get to use the money for whatever you want, be it home improvements, the trip of a lifetime, or helping the grandkids with university, and it means you don't have to move out of your home which could hold precious memories.

Even though house prices have been falling of late, they are still considerably higher than they were a decade ago, before the massive property boom, so you could benefit from unlocking some of its value instead of it just sitting there in bricks and mortar.

Equity release can be used to acquire a lump sum, but with pensions often not keeping up with the rising cost of living, many retirees opt to receive the money gradually, using equity release an a means of boosting their income.

The amount of cash you can release from you home varies – you could take out £10,000 or the entire value of the property – but reputable equity release companies will offer you a guarantee that means you will not go into negative equity, and that you will be able to remain in your home for as long as you wish.

The money does not have to be paid back in your lifetime, the equity release company simply recovers the money from the sale of the property when you die or if you move into full time care.

So, if you take out 25 per cent of the property's value, the equity release firm will take 25 per cent of whatever sum the property is sold for. Or, with other types of equity release, the amount you borrow is fixed for life and any fall or increase in the value of the property belongs to you or your family.

Some people believe that equity release leaves relatives short-changed when you die, by eating into their inheritance – to which other people say, 'so what? I've worked hard all my life and now I want to enjoy it.'

Why struggle to pay the bills and suffer through cold winters when you could unlock equity from your home to make ends meet or to spend the summer in sunny Barbados?

There are several options when it comes to equity release. To make sure you get the equity release plan that's right for you, experts recommend that you seek guidance from an Independent Financial Advisor, who can help you choose the one that best suits your needs.