Reasons Why Retirees Should Pick Equity Release as a Financial Option

ith shaky economic conditions and poor investment returns, retired and senior citizens are unable to live a comfortable lifestyle in retirement. State

sponsored pension plans are not doing lots of good either, leaving a question mark on fate of retirement. Lots of people have previously taken annuities, which have either used up or on the verge of getting finished. Under such gloomy financial circumstances, people are forced to weigh up other ideas.

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Equity release is one such beneficial plan that promises great return and high benefits to the senior citizens. This scheme has raised manifold in its popularity, it is evident from the fact that in the first quarter of current year, equity release has done a commendable business.

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There are certain criteria, which one needs to qualify in order to release equity from their house. First of all the person must be above 55 years of age and secondly, they should own a legal and dispute-free property.

Once you have qualified these criteria, you must seek the help from financial advisers. They help you a lot in clinching a beneficial deal. Financial advisers let you know the entire pros and cons of equity release scheme.

Here are some key benefits of equity release scheme:

Right of Tenure: There are not many mortgage policies that offer right to live in own property but equity release scheme provide you the right. Most interestingly, you are not charged with any sort of rent during the entire period.

No need to pay monthly interest: Equity release scheme facilitates great flexibility without any need to repay the loan on monthly basis. Usually, interest gets added to principal amount and repaid at the end of loan term. Most of the time, house is sold after the death of occupant and loan is repaid. Any

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outstanding value goes to the family members as inheritance. However, there is some flexibility with loan repayment as well. If you want to repay the loan on monthly basis, you should ask for interest only lifetime mortgage scheme.

Tax free income: Similar to other retirement plans, the income gained from equity release scheme is free of all the tax forms. It means that you own the entire income as no tax is deducted from it.

Flexibility in mode of payment: Usually, equity release offers the cash in lump sum but if you want to receive the money as per your requirements, drawdown lifetime mortgage facilitates you the service.

With such great means tested benefits, equity release promises of a happy life in retirement. The interest rate has been lowered on most of the schemes, so it’s a right time for you to withdraw equity from your house.

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