Lending Into Retirement

  • “I’ve heard there are not many Lending into Retirement options available to people over 55”
  • “I don’t have enough Pension income to enjoy my retirement”
  • “I have heard bad things about Equity Release”
  • “We want to stay in our home, but our current Lender says we need to sell it”
  • “We would love to financially help our children/grandchildren, but cant afford to do so”
  • “I want to enjoy my Retirement without the financial pressures”
  • “Are there options for lending into retirement for my buy to let(s)?”

I have heard all (and more) of the above comments in my time advising.

If you are aged over 55, do you think the Financial advice you require is different to that you received when you were 25 or 35? This is the question that kept coming up when I was discussing Finance with clients aged over 55.

Would you prefer to receive this advice from someone in the same group who personally understands this question?

I have been providing trusted advice ( Look at our Google 5* reviews) to people about Finance for over 25 years and many clients have been with me for these 25 years and as a lot of things in their lives, their Financial advice changes as they get older so I use my considerable experience and knowledge and the fact I fully understand the changes in the required advice to properly investigate all the best options.

There are a number of options available to you for lending into retirement and with my experience and qualifications, I will ensure I look at all of them for you.

The over 55s’ package is designed to help you find the right products for handling your estate during your life, securing the future of your estate after you die and more. We want what’s most appropriate for YOU and for you to enjoy your retirement!

Equity Release

We appreciate that choosing to release money from your home is a big decision and it is important to realise that there is more than one option available. Therefore, it is important to get advice to find out all the options available alongside all the benefits and considerations.

Why equity release no longer deserves its bad reputation of the past:

Modern equity release products are different from how they used to be years ago. You may have heard some horror stories of the past, where people inherited a significant debt as well as losing their parents’ property. That can no longer happen because:

  • all policies now come with a ‘no negative equity’ guarantee
  • the market is fully regulated by the Financial Conduct Authority who insist on additional training and certification specifically to be able to sell and advise on equity release products
  • by choosing a member of The Equity Release Council, such as ourselves (see our page on their website) you know that we have agreed to abide by the Council rules and have signed up to the Statement of Principles
  • there are a lot more lenders now involved so the choice and options are much more than they used to be

What equity release can be used for:

  • Repaying an existing mortgage or other debts to reduce your monthly outgoing
  • Home improvements
  • Take your whole family on a special holiday
  • Be able to help children/grandchildren with a deposit for a house or in some other way
  • Supplement your income for a more comfortable retirement
  • Supplementing your income for a more comfortable retirement

What is Equity Release?

Equity release is simply the process of turning the equity in your home into cash and is designed to help qualifying clients who either own their home outright or have a relatively small mortgage outstanding. You can either borrow against the value of your home, or sell all or part of it in return for a lump sum or a regular monthly income (or both in some instances). The loan will be repaid at a later date when the property is eventually sold.

Why is equity release becoming more popular?

The realities of later life are changing. Few of us are lucky enough to have a final salary pension and annuity rates have diminished. Meanwhile, we’re living longer and able to stay more active into later life, which means we need an income for more years. You might also find that your house needs a new roof and you’d rather not blow your savings to pay for it. And, if you have children you’ll know how hard it is to get a deposit together for their first home. These pressures mean we have to find different ways to fund our later years and equity release is just one of the ways we can do this.

How does equity release work?

There are 2 basic types of product: lifetime mortgages and property reversion schemes.

LIFETIME MORTGAGES These are interest only loans secured against your home or in some cases a buy to let owned by yourself. Any unpaid compounded interest plus the sum advanced are recovered from your estate.

PROPERTY REVERSION This is where you are paid a sum of money in return for a share of your property. The lender gets the same percentage share of your property value (including any appreciation) when you die. There are also hybrid schemes with elements of both.

*Equity release includes Lifetime Mortgages and Home Reversion Schemes. We can advise and arrange Lifetime Mortgages and will refer to an approved specialist for Home Reversion Schemes. Lifetime Mortgages are applicable for over 55s only, may affect means or state tested benefits and can affect the inheritance you may leave.*

Retirement Interest-Only Mortgages

What is a retirement interest-only mortgage?

A retirement interest-only mortgage is only available on your main residence and is very similar to a standard interest-only mortgage, with two key differences:

  1. The loan is usually only paid off when you die, move into long term care or sell the house
  2. You only have to prove you can afford the monthly interest repayments. This can be a major issue as they are only based on pension incomes and often only using the youngest pension income for assessment, so they are often very difficult to obtain.

While there’s no minimum age requirement, retirement interest-only mortgages are generally aimed at older borrowers, such as the over 55s, over 60s and pensioners who might find them easier to qualify for than a typical interest-only mortgage due to more flexible age restrictions.

In some cases, high street lenders particularly the Building Society’s will lend until age 90 if the income is provable and acceptable.