Equity Release

George115

My in-laws are considering an equity release scheme and both are in receipt of direct payments to help to pay for daily personal care. We contacted the local authority to ask if their allowances will be affected if they go ahead with equity release and were told that they would not be able to answer this question until the equity release was done. Has anyone been in a similar situation? Does anyone know of a website / official body we can go to for advice? We have been on the Equity Release website and are unable to find any information regarding this issue on there.
Thanks, George.

NeilCr

How about going through AgeUK?

http://www.ageuk.org.uk/products/financial-products-and-services/equity-release/

George115

Thanks Neil. Will check it out.

Bogalot

NeilCr wrote: »

How about going through AgeUK?

http://www.ageuk.org.uk/products/financial-products-and-services/equity-release/

It's not AgeUK that provides the equity release service, it's a third party that pays commission to them for referrals. They bury this in the small print. I would avoid them for this reason alone.

NeilCr

Bogalot wrote: »

It's not AgeUK that provides the equity release service, it's a third party that pays commission to them for referrals. They bury this in the small print. I would avoid them for this reason alone.

It's not exactly buried in the small print - it's out there in big letters!

I guess there is a hope/suggestion that AgeUK may have done due diligence on the third party and that gives some reassaurance. Difficult to work out who is reputable out there. In addition, AgeUK may provide a separate benefits service

Bogalot

NeilCr wrote: »

It's not exactly buried in the small print - it's out there in big letters!

I guess there is a hope/suggestion that AgeUK may have done due diligence on the third party and that gives some reassaurance. Difficult to work out who is reputable out there. In addition, AgeUK may provide a separate benefits service

The commission note is at the bottom of the page. It's certainly not in big letters.

Why do you assume AgeUK have done due diligence? That was not the case when they sold expensive utility tariffs in exchange for £6 million from E On.

I would at least edit your initial advice to point out that "going through AgeUK" is not actually going through AgeUK at all.

NeilCr

I don't assume. I said hope/suggest

It is very clear from the link that AgeUK say the advice is provided by a third party and that they have "teamed up" with the company concerned. Point taken re commission not being so "out there". I was really talking about using a third party being transparent

teddysmum

If you can't get the information you want (quoting income and the value of the of released funds would help), ask your MP to find out for you, as he/she will be able to access someone who does know the answer, rather than relying on a call centre person working from a check list.

George115

Thanks to all for the helpful advice.

pmlindyloo

This is a useful article about equity release>

https://www.moneyadviceservice.org.uk/en/articles/using-an-equity-release-scheme-to-fund-your-care

The reason why social services are saying that they do not know whether it will affect their direct payments for social care is because 1) there are different kinds of equity release and 2) it may depend on what the money is used for.

Since direct payments are subject to a means test then if they took a lump sum for something in particular e.g house repairs then this may be ignored as they are essential payments but if a lump sum was used to make gifts (for example) then this may be considered as deprivation of capital.

Also, getting a lump sum of money may effect their benefits (if they receive any).

So, it is a decision that needs some careful thought.