Are Home Equity Release Schemes Responsible?

Are you aged nineteen to twenty-five? are you contemplating a home equity release scheme? No? Why ever not? OK, so it’s probably a little far fetched to think someone in their youth would consider their retirement plans so early but to make the most of your pension pot, this is exactly the time to consider your retirement options.

At Squillions we’re famed for looking at the other side of the coin. If you’re over 55 years of age and the pension pot is looking a little bleak and you wish to enjoy the next forty years of your life then considering home equity release plans as an income resource has to be given some serious thought.

Confused? The point I’m trying to make early on is that pensions as they are today, are failing to supply the needs in our senior years. So whether you are of retirement age or just going into the world of work, you really do need to consider how life will be and where the money will come from when you stop working and are relying on the state or savings for an income.

Which is why this article is attacking you on two fronts. It’s true to say that home equity release schemes are for those over a certain age – currently fifty five, who are looking to release income from their property so as to provide for a better income in their senior years. But in the same instance, is it time to look at owning your home as not only having a roof over your head but as a personal investment also?

In our youth we rarely give a second thought to our future once retired, we only wish to earn enough so as to retire earlier. Those of you reading that have already reached this stage will be nodding your head in agreement. But if we look at property ownership as a real term investment, then it has to be said, property value increases in the last fifteen years have provided for a good future income.

Are home equity release schemes responsible though? Such is the financial regulation in the UK, you would have to suggest that you still need to read all the terms and conditions, and gain some great and good home equity release advice before going down this route.

However that said, there are two forms of home equity release; lifetime mortgages and home reversion plans. In both instances you will not receive the full amount you would expect if selling to move elsewhere. Home equity release is exactly that, about releasing equity in your property so you can stay in your own home.

The reason I mentioned youth at the start of this article was to suggest you get your own house in order before retirement comes of age. All investments are not without risk, whether you invest in stocks and shares, put into a company pension plan or pay into government schemes, you should really be ensuring for a life that’s full of stability and activity by the time retirement arrives.

The two equity release schemes enable you to receive monthly payments or a cash lump sum but you are effectively selling your property to the equity release company. Yet in both cases you will still be able to remain in your own home.

With lifetime mortgages and home equity release it is possible to take out a number of different clauses each seeing amounts partitioned or equity calculations worked out differently. Within lifetime mortgage equity release schemes there are several options. These are; drawdown plans, enhanced plans, protected plans, combined plans and interest payment plans.

The question being, which is best for you and should you really be contemplating responsible home equity release schemes and plans at all? A few key factors come to mind, the children, your children – will they lose out? How do you weigh up your life on earth with leaving an inheritance behind?

There are many questions to be asked and decisions to made before taking out a home equity release plan. But whether you are nineteen, thirty or fifty five, looking at the pension market as it is now and all the financial insecurities in the world, it really is time to think about your pension investment.

Find out more about responsible home equity release schemes and plans with Key Retirement Solutions. If you have questions about home equity release then Key are on hand to provide the answers. Check out their questions and answers FAQ here.