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Who is the Quintessential Equity Release Customer?

With people living longer these days, the rising cost of retirement, and increasing levels of debt, some, unfortunately, find that they haven’t actually planned well enough for their retirement. Because of this, they end up with a shortfall and need something to cover their expenses once the retirement well runs dry.

This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.

Enter equity release – which has experienced a revival in recent years because many individuals invested more in their property than in their pension plans. Why not reap the benefits of the equity in your home to help fund your lifestyle?

Equity release has been a popular topic recently and we’ve covered various aspects:

But who are the typical customers that tend to choose equity release?

Quintessential Customers

First and foremost, the very basic requirement for many equity providers is that the potential customer is at least 55 years old, but for some lenders, this age minimum is higher. The perfect age is for those hoping to enter retirement within the next decade or so but are worried they won’t be able to afford to continue living the lifestyle they are accustomed to. Many will still have mortgages that are no longer feasibly afford, or they simply can’t find a provider to renew the policy.

Sound mind, sound body

Of course, many use equity release to cover unexpected medical costs if the need arises, but you should be in good health before you actually take out a plan. There are alternative options to equity release to cover expenses if you expect to deal with certain health issues. The line to tread is difficult because if you are a young and sprightly 55-year-old, you may end up stuck with a plan (which utilises compound interest so you could quickly be looking at a hefty interest bill) for longer than you can afford. Consider waiting a bit longer if you can because the longer you keep your current mortgage, the more equity you’ll build up.

It’s crucial to remember that equity release is a lifetime commitment – the only way out is death or entering long term care. It’s important to truly understand the cost of your scheme and the restrictions you’ll deal with once you take out a plan.

No man is an island

Of course, before any important decision is made regarding your family’s home, you should discuss all viable options together with them. Using the equity in your home invariably depletes any inheritance you may have hoped to leave for your loved ones. Additionally, if you are currently receiving state benefits, taking out an equity release plan could impact your entitlements – extra income will affect pension credits and council tax support. Anything that is means-tested will be impacted, so if you rely on these, you may not be the ideal candidate.

Are you a prime candidate for equity release?

Essentially, you could be a prime candidate for equity release if you know you have wealth in your property and your pensions and savings are not sufficient to cover the lifestyle you would like in retirement – or you need supplemental funds if your health deteriorates.

However, like all financial planning opportunities, it’s best discussed with a qualified financial advisor as it’s not a one-size-fits-all solution. If you’re interested in learning more about whether or not equity release would be the right fit for your needs, get in touch with one of the team members at Dental & Medical Financial Services today.

Want to discuss equity release?
Investments | Financial Planning | Retirement | Save Tax | Protection |

Dental & Medical Financial Services have been helping doctors and dentists to build and protect their wealth, whilst saving tax for over 25 years.
Call Darren to discuss your options.

Tel: 01403 780 770


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