equity release

ukmartian

Buggins wrote: »

Without getting involved in the rights and wrongs of equity release, I would suggest a chat with Stepchange who I found through MSE some while ago and were most helpful.

Yup already have ...speaking to them next week...got to submit a new expenditure report...sigh...everything gone up except wages...so fair they been very good....

davieg11

kidmugsy wrote: »

So the old folk got to enjoy their own wealth? Outrage!

Very funny. They could have had a lot more than £20k to spend from a £180k bungalow if they hadn't used equity release. I see a newspaper still advertising this, when clearly it's a massive rip off that most old age pensioners wouldn't have fully understood. It's ok for us with the internet in this digital age to find out how poor value things like equity release are.

phillw

I don't understand why you'd want to borrow money at an extortionate rate, to clear debts that you are paying off at a preferential rate. Where is the moneysaving in that?

Linton

phillw wrote: »

I don't understand why you'd want to borrow money at an extortionate rate, to clear debts that you are paying off at a preferential rate. Where is the moneysaving in that?

If there is no over-riding wish to leave money for one's beneficiaries It is a lot more money saving using the equity of the house than dying with a small fortune lying unused - that surely is the ultimate waste of money. As is often said, "you can't take it with you".

Linton

davieg11 wrote: »

Very funny. They could have had a lot more than £20k to spend from a £180k bungalow if they hadn't used equity release.....

How?

Kidmugsy's comment seems reasonable to me. Can you suggest another strategy that doesn't disadvantage them in some way? Or is your real objection that they should have spent their wealth giving money to the family rather than on expensive holidays and bingo?

davieg11

Linton wrote: »

How?

Kidmugsy's comment seems reasonable to me. Can you suggest another strategy that doesn't disadvantage them in some way? Or is your real objection that they should have spent their wealth giving money to the family rather than on expensive holidays and bingo?

I've no objection about them filling their lifetime ambition to go to Graceland or play bingo. I was not a beneficiary either. I just find it dispicable how these companies advertise equity release with 2 smiley OAP's making it sound like a great deal and free money when clearly it isn't.

Linton

davieg11 wrote: »

I've no objection about them filling their lifetime ambition to go to Graceland or play bingo. I was not a beneficiary either. I just find it dispicable how these companies advertise equity release with 2 smiley OAP's making it sound like a great deal and free money when clearly it isn't.

I agree that these sort of complex financial arrangements should not be sold by simplistic mass advertising. However that does not preclude equity release being the right answer for some people in some circumstances.

TARDIS

ukmartian wrote: »

plus my health does not looks like it will be that good in 5 years lol...

This is the worrying bit that stands out to me.
You need good advice about the consequences of equity release if you become disabled and are no longer able to continue living in your current home as it can significantly restrict your options.

Malthusian

kidmugsy wrote:

So the old folk got to enjoy their own wealth? Outrage!

They got £20k worth of enjoyment at the cost of E*£72k worth of lost enjoyment from being able to help the people they care about. This is only a good deal if you need to give £3 to a loved one to get the same enjoyment as spending £1 on yourself. For most people this "empathy factor" is closer to 1:1 when it comes to their children or other heirs. Equity release is a horrendously bad deal until late old age, and the only cases I've seen where the borrower can genuinely say they have no regrets are those who are childless and have noone else they particularly care about.

That or if you love insurance companies three times as much as your children.

Linton

Malthusian wrote: »

They got £20k worth of enjoyment at the cost of E*£72k worth of lost enjoyment from being able to help the people they care about. This is only a good deal if you need to give £3 to a loved one to get the same enjoyment as spending £1 on yourself. For most people this "empathy factor" is closer to 1:1 when it comes to their children or other heirs. Equity release is a horrendously bad deal until late old age, and the only cases I've seen where the borrower can genuinely say they have no regrets are those who are childless and have noone else they particularly care about.

That or if you love insurance companies three times as much as your children.

Is love a question of ££££££s?

Roll-up equity release is expensive until perhaps your 80's. The circumstances where early use could be appropriate must be limited. If you havent the spare money now to pay for a few simple pleasures now you are likely to have a greater real need for it later in life. However it's difficult to say it's a bad deal unless you have something else to compare it with. A lifetime IO mortgage is an example of Equity Release and may be more appropriate earlier in retirement should you wish to convert income to capital.

Any argument about the oldies spending their own money now vs giving it to the next generation, if any and if they need it, is very far from being limited to equity release.