Your retirement could have even more going for it
A straightforward guide to equity release
Contents
Imagine what you could do 3 What exactly is equity release? 4 Is equity release right for you? 6 Who are Just Retirement Solutions? 8 Finding the right plan for you 9 How does equity release work? 10 Lifetime mortgage
Home reversion plan
Your questions, answered 13
What can I do with the cash I raise? 14
What now? 15
Imagine what you could do
In retirement you should be able to have the time of your life. It should mean having the time – and the money – to see more of the world, take up a new hobby or just spend more time with the family.
But for many, retirement comes as a bit of a shock. Sometimes, pensions and other investments fail to provide the retirement income you hoped you’d enjoy.
Your home could be the key to a much better retirement If you’re in that situation or want to treat yourself to some extras, it makes sense to consider the assets at your disposal that could provide additional funds. For most of us, our biggest asset is the house we live in.
Equity is the value of your property, less any mortgage or other loan you may have secured on it. To benefit from their equity, some people sell their home and downsize into a smaller, cheaper property. But there are other options.
With equity release products, you can access some of the value of your home without the need to sell up and move.
This guide will help to explain how the different kinds of equity release products work. It can help you decide if equity release is right for you and answers some of the most common questions that people ask. Please rest assured that at Just Retirement Solutions, we will never put any pressure on you or your family to go forward with equity release, so you’ll always have complete peace of mind.
What exactly is equity release?
Equity release is a financial product that gives you access to the money tied-up in your home without you having to move or downsize. Many people use the cash from equity release to clear their mortgage, reduce debts, make home improvements, take the holiday of a lifetime or improve their retirement funds.
Think carefully before securing other debts against your home.
Equity release at-a-glance
• You receive a tax-free cash lump sum.
• You can use the cash for almost anything you like.
• You will not have to move out of the home you love.
• You also have the option to guarantee an inheritance for your family.
• All our plans have a no-negative equity guarantee. This means you’ll never leave your estate in debt provided you meet the plan conditions.
• You are free to move to another suitable property without any financial penalty.
• You remain responsible for the maintenance of your property.
Equity release may not be right for everyone. It may affect your entitlement to benefits and will reduce the value of your estate.
Equity release may involve a lifetime mortgage or a home reversion plan. To understand the features and risks, ask for a personalised illustration. For more information on these plans, please see pages 10 to 11.
Please remember there is absolutely no pressure to buy and an advice and arrangement fee is payable only when you take out a product.
I have been extremely pleased with the service I received.
Everything was made very clear to me and I am very grateful for the work done in paying off my mortgage.
Mrs P, Berkshire
Is equity release right for you?
It’s important to bear in mind that equity release is a lifelong commitment and there are questions you should ask yourself to help decide whether taking out a policy is right for you.
Points to consider are:
• Will your current level of income keep up with inflation?
• Will the savings or investments you have meet future requirements such as long-term care?
• What would happen financially if you or your spouse became ill or died?
• How can you leave behind cash for your family, and how much?
A professional service with no pressure to buy
Your decision to take out an equity release plan should not be taken lightly. After all, it will reduce the value of your estate and might affect your entitlement to benefits. Your Just Retirement Solutions adviser can help you decide if it’s right for you.
If it’s not a good idea for you, your adviser will clearly state the reasons why. If it’s right for you, they’ll provide you with a personalised illustration and recommend a plan.
Your personalised illustration will show you exactly how much money you can expect to receive and will make all the features and risks clear.
Your adviser will also fully review your state benefits free of charge to ensure you are claiming everything you deserve and to show you how equity release may affect your current entitlement.
It’s a family affair Just Retirement Solutions understands that family is very important. So we always encourage you to involve your family in the decision-making process. After all, releasing cash from your home is a serious decision and will affect the amount that you may leave behind when you pass away.
Are you eligible for equity release?
To qualify for equity release you must:
• Own and occupy a UK property of standard construction.
• Be aged 55* or over (youngest applicant, if a couple).
• Your property must be worth at least £70,000*.
* Minimum age and property value varies between product providers.
Who are Just Retirement Solutions?
Taking out equity release is a big decision, so it’s important to get advice from someone you can trust.
Just Retirement Solutions was established in 2006. We are a member of The Equity Release Council, whose aim is to ensure that equity release products are safe and reliable so consumers can have confidence and peace of mind with equity release.
Retirement specialists We’re part of the Just Retirement (Holdings) Limited group of companies.
Established in 2004, the group specialises in financial solutions for those in or near retirement.
We take it personally
All our customers differ in what they want today and what they’d like for the future. Your adviser will always take the time to sit and discuss exactly what your particular requirements are, in order to come up with a plan that suits you. You can choose to do this either over the phone or in person.
No-obligation advice
We don’t believe in pressuring our customers to purchase so our advice is offered on a ‘no-obligation’ basis.
Good financial advice is worth investing in so you may not be surprised to know if you take out a plan that we recommend, a fee will be due. Our fee for advising on and arranging an equity release plan is £749.
If you decide against taking out a plan or equity release is not right for you, then there’s nothing to pay.
Finding the right plan for you
Just Retirement Solutions offers full financial advice on all types of equity release schemes from a range of product providers. All the providers we recommend provide a no-negative equity guarantee which ensures that you will never leave your estate in debt (subject to meeting the plan conditions).
Being fair to all our customers is important to us. So we regularly review our choice of providers and
We try to cover the vast majority of customer needs but we understand that everyone’s circumstances are different. If our current range of products does not cater for your particular requirements, we can also recommend other providers and give advice on their products.
Surveys show that 83%
of our customers said they would recommend the service they received to a friend or relative.
Just Retirement Solutions survey of 158 customers, April to June 2015.
How does equity release work?
There are two main types of equity release: lifetime mortgages and home reversion plans. Both allow you to remain in your own home and release cash to use for almost anything you want.
Lifetime mortgage
A lifetime mortgage is a type of loan secured against your home. It allows you to release a cash lump sum from the value of your property. Some plans even allow you to take smaller amounts of money as and when you need it.
You continue to own your home and benefit from any increase in its value.
With most lifetime mortgages, there
are no regular payments to make and nothing has to be paid back until the end of the plan. This usually happens when the last plan holder living in the property dies or moves into permanent long-term care.
There may be an early repayment charge if you decide to repay your mortgage early. Your adviser will explain this in detail.
Advantages: Considerations:
• You receive a tax-free lump sum.
• You continue to have full ownership of your home and benefit from any increases in its value.
• You can live in your home for the rest of your life.
• It will reduce the value of your estate.
• The debt will grow as interest is applied over the long-term.
• Early repayment charges may apply if you repay early.
• Your entitlement to state benefits may be affected.
This is a lifetime mortgage. To understand the features and risks, ask for a personalised illustration.
Advantages: Considerations:
• You receive a tax-free lump sum.
• You can guarantee an inheritance for your children – if you only sell part of your property’s value.
• It’s not a loan so there’s no interest to pay.
• You can live in your home for the rest of your lifetime.
• You can usually release higher amounts than a lifetime mortgage.
• It will reduce the value of your estate.
• The home reversion company owns a share, or all, of your home.
• Home reversion plans cannot usually be repaid, as you are selling all or part of your home.
• Your entitlement to state benefits may be affected.
Home reversion plan
Home reversion plans involve selling part, or all, of your property to a home reversion provider in return for a cash lump sum. Whilst all or part of your home will belong to someone else, you can remain living there for the rest of your life, rent-free.
A home reversion plan is not a loan so there’s no interest to pay. However, if your home increases in value, you will only benefit from the increase in value of the proportion you retain. When you die or move into permanent long-term care, the property will be
sold and the home reversion company receives its share of the proceeds.
You should be aware that when you take out a plan you will normally receive less than the current market value of your home. This is because the reversion company who buys your home cannot sell it until you, or both of you if borrowing jointly, have died or move into permanent long- term care, so they need to protect themselves against any potential loss in value (if the housing market falls).
Equity Release has made a real difference to our lives and has allowed us to fit a new kitchen, landscape our garden and buy a new bed. We were very impressed with the service and at how knowledgeable and friendly our adviser was.
Mr and Mrs T, Wales
Your questions, answered
Will I still own my home?
If you take out a lifetime mortgage, yes. But with a home reversion plan, the provider you go through will own part, or all of, the property.
Rest assured both products allow you to live in your home for the rest of your life.
Will I be able to move house?
Generally yes, many plans can be transferred to a new home, provided your new property can act as acceptable security. With a lifetime mortgage, if you are moving to a property of lesser value you may have to re-pay some of the outstanding loan.
What happens if my partner or I need long-term care?
Long-term care should not affect the terms of your plan. Where the plan is in joint names and one of you leaves to go into a care home, the other can continue to live in your home.
Remember though, that the plan will normally end if you both go into permanent long-term care.
How much will it cost?
With any traditional mortgage, there are always costs and fees involved – the same is true of equity release.
Good financial advice is worth investing in so you may not be surprised to know if you take out a plan that we recommend, a fee will be due. Our fee for advising on and arranging an equity release plan is £749.
If you decide against taking out a plan or equity release is not right for you, then there’s nothing to pay.
In addition, other costs include a valuation fee, an arrangement fee and your solicitor’s fees. Total fees differ from one product to another.
Your adviser will discuss and set out all fees and costs in detail before any decision is taken.
What can I do with the cash I raise from equity release?
The answer is almost anything you choose. However it’s important to start with the view that funds generated from equity release are to help you add to your total retirement pot; that’s why we suggest you discuss your needs with a Just Retirement Solutions adviser first.
Everybody’s circumstances are different of course, but from research† that we’ve conducted, the top five ways our customers use their funds for are:
1. To clear a mortgage
Usually mortgage repayments are the largest monthly household expense.
That’s why many people use their funds to clear their mortgage early so they don’t have to worry about meeting their mortgage payments as they get older.
2. To make home improvements
Once people start approaching retirement, they want to make sure that their home is as comfortable as possible. So many of our customers decide to use part of their funds to update their home. It may be a new kitchen or bathroom, a new boiler or better insulation, or simply redecorating.
3. To clear outstanding debts In retirement, peace of mind about your finances is incredibly important
4. To help a loved one
Many people choose to use some of the money to help out their children or another family member. It could be help with school fees, a deposit on a new property or funding a family holiday. Some people also like to make cash gifts to grandchildren, nephews and nieces.
5. To purchase a new car As people head into retirement, some choose to change their car and buy something new that will last for years to come. For others the choice is about switching to something that’s more economical.
Think carefully before securing other debts against your home.
What now?
Equity release is a big decision so it is essential to take professional financial advice before moving ahead with an equity release plan.
Just Retirement Solutions offers expert, professional financial advice.
If equity release is right for you, then your adviser will recommend the most suitable product for your circumstances from a range of providers. If your adviser doesn’t feel it is right for you, they will tell you why.
1. Call us on 0800 015 0993 to discuss your circumstances, review your eligibility, and if appropriate, arrange an appointment with a Just Retirement Solutions adviser.
2. Your adviser will meet you to discuss your goals and
requirements, help you to consider all the options, look at alternatives and answer your questions. They will help you decide if equity release is right for you.
3. Your adviser will present
recommendations and, if you feel comfortable, help you complete your application, which will be sent to your chosen provider to arrange a valuation to be made on your property.
4. The provider will issue your offer directly to you. Once the legal paperwork is complete, your funds will be released.
For more information contact:
Telephone: 0800 015 0993
Lines are open Monday to Friday, 9am to 6pm, excluding bank holidays.
Or visit:
www.justretirementsolutions.com Email:
support@justretirementsolutions.com
