Equity release and the pension crisis

chanxx

Hi Fellow Money saving experts and Martin,

Why cant we put pressure on the govt to create an equity release scheme to help out the pensions crisis - if the govt managed such a scheme, I'm sure it could still recover its money, and offer people larger shares of their equity. I tried to get my MP interested in this but he dismissed it out of hand....what do you all think ?

Pal

Is there something wrong with the current equity release products on the market? I haven't looked into it, but given that it is a competitive market, I am not sure that a government-run centralised scheme would be that different.

EdInvestor

Agree with Pal, the equity release products are improving all the time, no need for any Government involvement except monitoring by the regulator in the usual way.

Zipped50

How do I find a good company to use to get equity release on my house ?

Thanks in advance

EdInvestor

Make sure the provider is a member of SHIP

http://www.ship-ltd.org/

Three main things to watch out for:
-as low an interest rate as possible
-the ability to draw down the money over time as and when you need it, not all at once (this saves massively on rolled-up interest)
-redemption pealties ( you may wish to remortgage your equity release deal on better terms later - this market is developing rapidly and terms are improving very quickly).

Zipped50

Thanks so much for taking time out to answer , I really do appreciate it.

Chhers

EdInvestor

You're welcome Z50. Please report back if you go for this, as there's not enough info about the pros and cons of equity release yet IMHO.

margaretclare

EdInvestor wrote:

Please report back if you go for this, as there's not enough info about the pros and cons of equity release yet IMHO.

Hi Ed

We did equity release 3 years ago. We had an IFA who helped us find a good deal, but we also did our own research.

The reason we did it was to pay off an existing mortgage which would have gone on until we're 83 (we were 68 when we did it). 25% of the equity on this 2-bedroom bungalow in south Essex. This freed up £260 a month which, we thought, can be put to better use.

We know about the interest rolling-up, but as we're not too bothered about leaving a large inheritance to our heirs, and as we're guaranteed the ability to live here as long as we want and guaranteed no negative equity, we're happy about it all.

We didn't think of treating it as our pension fund though - we have enough pensions from other sources. As you can see from my posts in other threads, I'm still saving!

Margaret Clare