If you are approaching your retirement years and looking to ensure that your bank balance remains healthy, you may be keen to supplement your pension plan with some extra funding. For many people over the age of sixty, equity release schemes appear to be the solution here.
Equity release, famous as a route around inheritance tax or death duties, is the broad name for a range of different loans and mortgages, all of which are founded on the value of your property. A basic equity release plan allows you to borrow money from a third party and to secure this sum using your house.
This borrowed amount is then paid out either in instalments, or as a lump sum, and all the while you are allowed to remain in occupancy of your home. This kind of scheme is designed to extend beyond your lifetime when the debt can be repaid with the sale of the house.
One of the key drawbacks to equity release is the fact that while it affords you the opportunity to bolster your income, it also significantly reduces the estate that you can leave as inheritance. However, if you are careful when it comes to choosing a plan, you will find that there are several means by which you can remedy this situation, the simplest of which is to go for an equity release scheme that offers an inheritance guarantee.
Equity release is a useful financial tool if you are looking to maximise your income during your retirement; however, it is not without its pitfalls. In order to ensure that you leave something of an estate for your family, you will want to take care to choose a policy that allows you to do this.