Understanding Equity Release
Equity release allows homeowners, usually aged 55 and above, to access some of the money tied up in their homes without having to sell or move out.
There are two main types:
Lifetime mortgage: You borrow against your home but remain the owner. The loan and interest are repaid when the property is sold, usually after you pass away or move into long-term care.
Home reversion plan: You sell a share of your home to a lender in return for a lump sum or regular income, but you continue to live there rent-free for life.
As more people over 60 look for ways to ease the pressure of rising living costs and fund a comfortable retirement, equity release has become an increasingly popular option.
The Main Benefits of Equity Release
Tax-free cash
The funds you release are typically tax-free, giving you extra money to spend, invest, or gift to family members.
Stay in your home
You can unlock the value of your property while continuing to live there for as long as you wish.
Flexible use
Many use the funds to pay off debts, renovate their homes, help their children, or simply enjoy life a little more.
No negative equity guarantee
Most modern plans include a promise that you will never owe more than your home is worth when it is sold.
Helping with later-life costs
Thousands of people over 60 are using equity release to manage expenses such as home improvements, medical care, or additional retirement income. It can be a way to make your money work for you in later life.
The Potential Drawbacks
Interest can grow over time
If you choose not to make repayments, the interest is added to your balance and compounds over time. This means the amount owed can increase quickly.
Smaller inheritance
Because you are borrowing against your home, the value of your estate may be lower, leaving less for your loved ones.
Impact on benefits
Receiving a lump sum could reduce eligibility for certain means-tested benefits.
Higher costs and fees
Equity release rates are usually higher than conventional mortgages, and you may need to pay valuation, legal, or arrangement fees.
Reduced flexibility
Some plans have early repayment charges or restrictions on moving to a new home later on.
How to Make Equity Release Work in Your Favour
At My Later Life, we help clients make the most of equity release while avoiding common pitfalls. Here are some key ways to make it a positive decision:
Borrow only what you need
Avoid taking more than you require right now. Smaller, phased releases can reduce interest build-up.
Make repayments if you can
Treat it like a standard mortgage. Paying off some or all of the interest regularly will stop the balance from growing too quickly. This approach helps you protect the value of your estate and increase the assets you leave to your family.
Consider your long-term plans
Think about how equity release fits into your wider retirement goals. Will you need funds for care, home modifications, or other expenses later?
Protect your inheritance
Some plans allow you to reserve part of your home’s value so you can leave a guaranteed inheritance for loved ones.
Use regulated, trusted providers
Always choose a firm that is regulated by the Financial Conduct Authority and a member of the Equity Release Council. This ensures you are fully protected and receive honest, impartial advice.
Why More Over-60s Are Turning to Equity Release
Rising property prices mean that many homeowners have significant equity locked up in their homes. For those aged 60 and above, equity release offers a way to turn that value into financial freedom without moving house.
People are using it to:
Supplement their retirement income
Pay off existing mortgages or debts
Fund home improvements or adapt their homes for the future
Support children or grandchildren financially
Reduce the pressure of later-life costs
By releasing equity, you can enjoy a more comfortable lifestyle while maintaining control of your home and your future.
Why Choose My Later Life?
My Later Life is proud to be recognised as one of the market leaders in equity release advice. Our company has received multiple industry awards for the quality of our service and the dedication of our advisers.
We research the market every day, tracking new products, schemes, and updates from the wide range of lenders we work with. This constant monitoring allows us to find the most competitive deals and the most flexible plans available.
When you come to us for help with equity release, you can trust that we will search the entire market to find the best option for your needs. Our experienced advisers explain everything clearly, ensuring you fully understand how each product works before you make a decision.
At My Later Life, our mission is simple: to help you make confident, informed choices that support your financial wellbeing and the legacy you wish to leave behind.
Is Equity Release a Good Idea for You?
Equity release can be a good idea if you are over 60, own your home, and want to access additional funds without moving. It can help you manage later-life expenses, improve your home, or simply give you more comfort and security in retirement.
However, it should be approached carefully. If you can, try to make regular repayments just like a conventional mortgage. This keeps compound interest under control and ensures you leave as much as possible to your loved ones.
Used responsibly, equity release can be a flexible and rewarding solution that helps you enjoy your retirement on your own terms.
Key Takeaways
