We are SOLLA Accredited

SOLLA helps people and their families in finding trusted accredited financial advisers who understand financial needs in later life. A well-qualified financial adviser who is also somebody who understands the plans you need to make for your retirement years.

We are incredibly excited to announce we are now SOLLA Accredited Equity Release advisors.

SOLLA helps people and their families in finding trusted accredited financial advisers who understand financial needs in later life.

A well-qualified financial adviser who is also somebody who understands the plans you need to make for your retirement years.

The complexities of the many decisions you or your family may need to face when looking at issues such as care funding matters or whether equity release is the right thing for you, need careful and considered advice.

Financial advice should help you make clear and informed decisions knowing that you have had the information and choices presented to you in a way that helps you make the best choices and decisions for you or for a family member.

Contact us to find out how we can help you

All SOLLA later life advisers specialise in the financial needs of older people. Professional qualifications, whilst essential, do not always give a full picture of an adviser’s experience or expertise.

Those advisers who have taken the further step to become independently accredited can offer the added reassurance that they can give the practical help and guidance needed to help you make the right decisions at the right time.

Why would anyone choose a financial adviser offering anything less?

All full members of the Society must achieve the Later Life Adviser Accreditation and adhere to a Code of Practice to ensure their clients know what to expect from their services. Accredited advisers can advise on:

  • Retirement Planning – pensions and annuities
  • Funding for Care Home fees
  • Funding for care in your own home
  • Equity release and other property options
  • Savings and investment planning
  • Tax matters and estate and wealth planning

Six equity release myths busted

Here, we debunk equity release myths and explain the role equity release can play in boosting your finances

Here, we debunk equity release myths and explain the role equity release can play in boosting your finances

Although equity release has soared in popularity in recent years, many people still have misconceptions around how it works. These equity release myths often mean that people overlook the benefits of a lifetime mortgage. 

A lifetime mortgage, the UK’s most popular type of equity release scheme, enables you to access a portion of your home’s wealth as a tax-free lump sum. This sum, plus the interest accrued, need only be repaid upon your death or when you move into long-term care and your property is sold

Visit our Equity Release page or contact us for more

Equity Release grows 28% on 2020

Indeed, the number of customers who have used equity release to repay
their mortgages has almost doubled in 12 months

The number of customers who have used equity release to repay their mortgages has almost doubled in 12 months

In 2021, existing customers took an additional £494 million in drawdown and further advances to take the total amount released to £4.89 billion (FY 2020 – £3.88 billion). Interestingly, while the market hit new heights in FY 2021, this was driven by the size of the average amount released rather than the number of customers. This peaked in FY 2018 when 47,081 plans
were taken out.

In FY 2021, customers took out an average of £104,792 which is
substantially higher than the £84,919 (FY 2020) and £76,359 (FY 2019) taken in previous years. While after a challenging 2020, many had high hopes for 2021 returning to more normal market conditions. This was impacted by the ongoing threat of Covid which saw customers continue to focus on meeting pressing needs such as debt repayment or supporting wider families via gifting rather than discretionary spending on holidays or
home improvements.

Indeed, the number of customers who have used equity release to repay
their mortgages has almost doubled in 12 months from 20% (FY 2020) to
38% (FY 2021) while at the same time spending on holidays has fallen from
23% (FY 2020) to 7% (FY 2021). Still buoyed by the Stamp Duty Holiday
which finished at the end of September, 22% of equity release customers
used housing equity to support families (27% – FY 2020)

See how much you could borrow here

Source: Key Market Monitor 2021 available to download here

OneFamily: Over-50s using equity release to stay in homes

The experiences of the past 18 months mean three-quarters (76%) of over-50s are now more likely to stay in their current home for life, according to research from financial provider OneFamily.

Having had a garden during lockdown was a factor in the choice to stay for more than half (53%), while 26% simply realised how much they love their home.

OneFamily also found that 23% of over-50s were keen on keeping space at home for loved ones to visit, while 21% wanted to remain in their current house in order to pass it on to family.

Over-50s using equity release to stay in homes - Belper, Derbyshire - Missing Element Mortgage Services

On the financial side, factors such as high house prices (10%), as well as the hassle and cost of moving (31%) were major influences.

Three in five (60%) over-50s said they are unlikely to move house any time soon.

Of these, 24% would consider taking out equity release to free up cash from the value of their property.

Meanwhile, 17% say they would rather spend money to make their house more accessible than relocate.

The same proportion (17%) say they would be very reluctant to move to a smaller warden-assisted flat or care home in old age.

While one in 20 (5%) over-50s had already taken out equity release, OneFamily said this appetite for renovation rather than relocation could drive new uptake.

Paul Bridgwater, head of products at OneFamily, said: “One side effect of the pandemic is that homeowners have grown more attached to where they are living.

“Whether that’s down to having appreciated access to green space, or more intangible factors like family ties and memories attached to a home, our research suggests people seem to be more reluctant to look into downsizing or relocating than they were before.

“But staying in a forever home can mean extra expenses.

“As such, we may be set to see a rise in equity release uptake to fund renovations and adjustments to improve or adapt homes to allow for the more complex needs of later life.

“Taking out equity release is a decision to be weighed up carefully with input from family members.

“It won’t be the right solution for everyone but if this trend for staying in the family home continues to grow, advisers will play a key role in helping over-50s explore their options and make the right choices.”

Source: OneFamily: Over-50s using equity release to stay in homes – Mortgage Introducer

Is Equity Release A Good Idea for 2022?

What is equity release?

Equity Release is a way to unlock money from the value of your property.

You normally do this by taking out a mortgage loan secured against your home.

People typically use these products to top up the money from their pensions, help out younger family members, or make home improvements.

To use these services, you must be at least 55 years old. This is the minimum age for a life mortgage. However, you must be at least 60 for a home for life plan. 

You also need to own a property in the UK worth a minimum of £70,000. It must be in good condition.

There are usually no monthly payments to be made, and you get to continue living in your home without paying rent.

What are the advantages of equity release?

Lifetime Mortgages

  • Lifetime mortgage equity release interest rates are fixed for life. Standard equity release rates of interest in 2020 are between 4-6% AER, although you may find that the cheapest schemes start at around 2% AER.
  • Because the percentage of interest on your loan is fixed, debt can build up quickly and the product can become very expensive. Interest will continue to roll up on the amount you borrow for the rest of your life.
  • You will not be able to leave your home to your family as inheritance. This is because your house will be sold either upon your death, or after you enter long-term care, in order for your loan and its interest to be repaid.
  • Like their name suggests, a lifetime mortgage is a lifelong commitment. It is very difficult to terminate the plan early. If you do later decide that you want to end the agreement, you will need to pay an Early Repayment Charge which can be very costly.
  • You cannot take out any other mortgages secured against your home will you have a lifetime mortgage. Any outstanding debts of this kind must be paid off when you receive your cash lump sum.
  • There are additional costs that you must pay during the application process. For instance, you may need to pay a fee for the valuation of your property, or pay for financial advice.
  • The maximum loan you can receive with a lifetime mortgage is calculated using a certain percentage (LTV) of your property’s true market value. An average LTV is about 25-60% of the price your property is worth.
  • Getting an equity release loan can negatively impact your tax position. You may also lose your eligibility for means-tested benefits and pension credit, both now and in the future.
  • Equity release is not an appropriate option for you if you are currently living with any dependants.

What are the disadvantages of equity release?

Again,  the exact disadvantages depend on your financial situation and the type of equity release product you select. Below are some of the pitfalls that you might come across.

Speak to an adviser to receive more personalised financial advice about how equity release might affect your individual situation both now and in the future.

Lifetime Mortgages

  • Lifetime mortgage equity release interest rates are fixed for life. Standard equity release rates of interest in 2020 are between 4-6% AER, although you may find that the cheapest schemes start at around 2% AER.
  • Because the percentage of interest on your loan is fixed, debt can build up quickly and the product can become very expensive. Interest will continue to roll up on the amount you borrow for the rest of your life.
  • You will not be able to leave your home to your family as inheritance. This is because your house will be sold either upon your death, or after you enter long-term care, in order for your loan and its interest to be repaid.
  • Like their name suggests, a lifetime mortgage is a lifelong commitment. It is very difficult to terminate the plan early. If you do later decide that you want to end the agreement, you will need to pay an Early Repayment Charge which can be very costly.
  • You cannot take out any other mortgages secured against your home will you have a lifetime mortgage. Any outstanding debts of this kind must be paid off when you receive your cash lump sum.
  • There are additional costs that you must pay during the application process. For instance, you may need to pay a fee for the valuation of your property, or pay for financial advice.
  • The maximum loan you can receive with a lifetime mortgage is calculated using a certain percentage (LTV) of your property’s true market value. An average LTV is about 25-60% of the price your property is worth.
  • Getting an equity release loan can negatively impact your tax position. You may also lose your eligibility for means-tested benefits and pension credit, both now and in the future.
  • Equity release is not an appropriate option for you if you are currently living with any dependants.

Is equity release safe?

It is only natural that you want to answer the question “how safe is equity release or is equity release safe”.

You will be pleased to hear that all equity release products are authorised and regulated by the Financial Conduct Authority and Equity Release Council.  The Equity Release Council build protections into every approved provider’s plans. Therefore, they can be viewed as relatively safe.

For example, they include a no negative equity guarantee. This ensures that you will never have to pay back more than the total value of your property.

The no negative equity guarantee can reduce worries because you will know that despite the fixed interest rate, your loved ones will never end up owing more than you can afford.

In a home reversion scheme, you will also be granted a Lifetime Lease. This legal document promises:

  • That you will be permitted to continue living at home for the rest of your life even though you are no longer the sole homeowner;
  • And that you will never owe any money as rent while you live there (unless your deal specifies that you pay a small amount of money as nominal rent to the landlord, such as £1 or £2 a month).

 

Is it worth taking equity release?

As outlined above,  the risks associated with equity release depend on which type of equity release you are interested in. It is important to remember that any kind of equity release may impact your tax position and your eligibility for means-tested benefits both in the present and in the future.

Using equity release to unlock some extra income or a lump sum will also mean that your family have less to inherit.

When you unlock equity from your property, you are making a lifelong commitment. It is extremely difficult to back out once you have signed the deal.

If you decide you no longer want the agreement, you will need to pay a large Early Repayment Charge.

You should contact us for more information about the pros and cons of releasing equity from your home.

We can give you more details about the range of plans on offer, the featured content, and the difference in rates across the services providers.

We will also explain the alternatives that you have available.

For home reversion, we act as introducers only