Interest-Only Equity Release

cosmos2

Hello,

I'd like some advice about where my father stands with his pension credit after releasing equity from his property.

He is looking to release a lump sum to purchase another property [the property will not be under his name], and is concerned that he will loose his pension credit.

He doesn't receive state pension, just credit.

Any advice, links, or past experiences would be welcomed.

Thanks

Cannon_Fodder

Gifting money in old age is a minefield.

Tax will be payable, should he die within 7 years, unless it is in relatively small amounts.

It could be considered deliberate deprivation of assets, if its shortly before he needs to go into a care home, and the council needs to sell his home to pay for his care. http://www.ageconcern.org.uk/AgeConcern/Documents/FS40Deprivation_of_assets_in_the_means_test_for_care_home_provision.pdf


re Pension Credit specifically, I suspect page 21 of http://www.thepensionservice.gov.uk/pdf/pensioncredit/pc10sjan09.pdf will apply...

"Capital disregards"

When we calculate capital we ignore certain types of capital assets and lump-sum
payments, either for a period of time or for good.
The following paragraphs show examples of disregarded capital.
Personal possessions, for example a car, furniture and fittings in the home, family
belongings, etc.

Houses and land
If your customer owns the home they live in

• the value of the home (property, garage and outbuildings) is ignored unless any
part of the property could be reasonably sold off separately;

• money raised through a loan on the property or through equity release is not
ignored (unless it is for necessary repairs and improvements);

dunstonh

He is looking to release a lump sum to purchase another property [the property will not be under his name], and is concerned that he will loose his pension credit.

That smells ripe to be considered deprivation of assets and almost certainly would wipe out his pension credits and associated benefits.