Equity release plans are popular for a number of valid reasons. One of the many reasons for their growth in popularity relates back to the way in which they can be used, which has expanded quite substantially in the last 15 years. There was a time equity release plans were really only intended to help make your retirement more comfortable. Now, today, there are a plethora of reasons why homeowners turn to equity release for their financial needs and desires.
There are truly countless ways to use your equity release, but below you will find some of the more popular reasons homeowners are turning to equity release schemes during retirement.
1. Consolidating Debt. You likely want to have a clean slate when it comes to debt in your retirement. While the debt itself is burden enough, it also comes with additional interest. What cost you a few thousand dollars ends up costing you far more in the long run. You can use your equity release cash to pay off the debt you are currently carrying.
2. Home Improvements. You might need improvements made to your home, or maybe you just want to improve it. Those improvements are often quite expensive and perhaps you just didn’t have the extra income to do them in the past. With equity release, you can get them done. This can be a double win for you, as improvements to your home can also improve its overall value, which can help you when it comes time to finally sell. It can mean that you are in a better position to leave an inheritance to your loved ones.
3. Take care of your Children. It is true that an equity release scheme can limit how much inheritance you are able to leave behind to your loved ones. However, with the cash you receive, you can gift money to your children and grandchildren. The benefit of doing it this way is that you actually get to see them enjoy the money.
4. New Vehicle. When you were working and likely following a stricter budget, you probably didn’t have the extra cash to purchase that car you always wanted. With equity release cash, you finally can.
5. Move. Equity release plans can be used to upsize your living situation. You can use an equity release calculator to determine how much equity you could take out on a property with a higher value. The extra equity available could help to bridge the gap between the sale price of the property with the lower value and the purchase price of the more expensive one.
6. Inheritance Tax. You can mitigate your inheritance tax liability with equity release. The effectiveness of this strategy depends on a few factors, but we can guide you through whether this would be a feasible option for your situation or not.
7. Income. You can choose to receive your equity release as a periodic income which means that you can budget it right in with your other income streams, if applicable. Take advantage of the flexibility of a drawdown plan and receive cash in much the same way you did when you were working.
8. Holidays. You likely didn’t get to take all the holidays you wanted when you were raising your family and working. Now is the time and equity release can give you the cash you need to do so.
9. Long Term Care. If you need services but are short on cash, equity release might be the answer. If this is the case for you, trying to pay for services can be incredibly stressful. Equity release can help alleviate that burden.
10. General Expenses. Maybe you don’t want to have to plan for the spending of your equity release and that is just fine! You don’t have to which is part of the beauty of an equity release plan. There are no restrictions and you can do with the money what you want.
This list is not exhaustive. Equity release truly can open a number of doors for you during retirement. If you have additional questions or just want to explore your options, please reach out to us today for specialized advice and guidance.
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