The short version: Equity release lets you access money tied up in your home without selling it. You usually need to be over 55. It’s a way to boost your income or get a lump sum in retirement while still living in your property.
How does it work?
There are two main types. A lifetime mortgage is where you borrow against your home and the loan (plus interest) gets repaid when you die or move into care. A home reversion is where you sell part of your home to a provider in exchange for cash, but keep living there rent free.
Is the money taxable?
No. Money from equity release isn’t taxable income. However, it does reduce the value of your estate, which affects what you leave behind and could impact Inheritance Tax calculations.
Things to think about
Interest on lifetime mortgages can add up quickly because it compounds over years. Your family will inherit less. It might affect your entitlement to means tested benefits. And once you’ve done it, it’s hard to undo.
Always get independent financial advice before committing to equity release. It’s a big decision.
Considering equity release and want to understand how it fits with your overall finances? We’re happy to chat through the implications.
