Telegraph article re: Pensions "tax loophole" to be scrapped under government plans

NannaH

I suppose it depends on whether you live over 7 years after gifting the proceeds re IHT. 

 Plus you could exhaust even the largest  pension if both need care homes,  then the Council would want the house and possibly the equity release funds back too, they will go back 20+ years if they suspect deprivation of assets.   Might be an unlikely scenario but I bet it’s happened. 

michaels

NannaH said:

I suppose it depends on whether you live over 7 years after gifting the proceeds re IHT. 

 Plus you could exhaust even the largest  pension if both need care homes,  then the Council would want the house and possibly the equity release funds back too, they will go back 20+ years if they suspect deprivation of assets.   Might be an unlikely scenario but I bet it’s happened. 

Thanks - I wasn't thinking of gifting the equity release but more using it to live off thus avoiding drawing out of the pension pot with its favourable IHT treatment

NannaH

I imagine there are pros and cons to using  equity release for living expenses.
The most you can get is 60% of the value and the younger you are, the less the percentage.
Ok if you have a home worth £500k,  not so good if it’s under £250k (like mine). 

You also need to pay the interest so it doesn’t snowball and take the whole value of the house in time. 

With interest rates high,  it would be a lot to pay out.