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  • FIRST POST
    • Pobby
    • By Pobby 17th May 19, 8:06 PM
    • 5,224Posts
    • 11,334Thanks
    Pobby
    Equity release
    • #1
    • 17th May 19, 8:06 PM
    Equity release 17th May 19 at 8:06 PM
    Looking for a bit of help. Currently, my wife and I live with my sister in law. Our house is worth around 450,000. We have 40%, sister in law 60%. My wife and I are retired with OK pensions and good savings. The eldest is me at 70, the youngest is sister in law at 61. She is totally fed up with her job and would like to retire, at retirement she would get a full state pension and company pensions.

    So onto funding. Would equity release be suitable? I think it is possible to convert the cash to a drawdown pension. My wife and I would not need to take a share in the proceeds but would like to do so when my sister in law retires.

    Any thoughts please?
Page 1
    • AnotherJoe
    • By AnotherJoe 17th May 19, 8:32 PM
    • 14,251 Posts
    • 16,959 Thanks
    AnotherJoe
    • #2
    • 17th May 19, 8:32 PM
    • #2
    • 17th May 19, 8:32 PM
    Do you mean that your SIL would not get full SP until age 67 and company pension at age ? 65?
    And wants to bridge the gap between now and then?
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
    • Linton
    • By Linton 17th May 19, 8:46 PM
    • 10,627 Posts
    • 10,982 Thanks
    Linton
    • #3
    • 17th May 19, 8:46 PM
    • #3
    • 17th May 19, 8:46 PM
    You would need to discuss your options with a specialist broker. I can see major problems with equity release here..

    1) I dont see how it would work with split ownership. ER is based on the lender getting repaid when the house is sold after the person taking out ER dies or goes into full time care. Clearly this cannot happen with split ownership. What would happen if say sister in law dies in 10 years time whilst you and your Mrs are still in good health?

    2) The money you get from ER is very dependent on the age of the younger of what is normally a married couple. From the Aviva calculator someone aged 60 would only get a maximum of about 25% of the equity.



    Can you make it clearer as to how much and when s-i-l needs the money? Do you have enough cash to help her out? If so would she have enough income to repay you after she receives her pensions? Perhaps there are alternative possibilities to ER. Could you buy some of the house equity from her? Perhaps if you have significant excess income you could buy the lot with the help of a lifetime interest-only mortgage?
    • lisyloo
    • By lisyloo 17th May 19, 9:00 PM
    • 24,036 Posts
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    lisyloo
    • #4
    • 17th May 19, 9:00 PM
    • #4
    • 17th May 19, 9:00 PM
    Have you considered downsizing to something smaller or cheaper area?
    • xylophone
    • By xylophone 17th May 19, 10:14 PM
    • 29,475 Posts
    • 17,946 Thanks
    xylophone
    • #5
    • 17th May 19, 10:14 PM
    • #5
    • 17th May 19, 10:14 PM
    What kind of "company pensions" does your SIL have?

    If DC, she is old enough to access them.

    If DB, has she looked into taking the pension(s) with actuarial reduction?
    • Sea Shell
    • By Sea Shell 18th May 19, 6:05 AM
    • 1,686 Posts
    • 2,909 Thanks
    Sea Shell
    • #6
    • 18th May 19, 6:05 AM
    • #6
    • 18th May 19, 6:05 AM
    When you say "we" have 40%, do you actually mean your wife owns 40%, rather than each of you owning 20%?
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow "
    • IvanOpinion
    • By IvanOpinion 18th May 19, 9:55 AM
    • 20,005 Posts
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    IvanOpinion
    • #7
    • 18th May 19, 9:55 AM
    • #7
    • 18th May 19, 9:55 AM
    My take on equity release is that it should be considered only as a last resort. The concept of compound interest can work badly against you under equity release. So explore all other options first.
    Ivan has left the building ... but reserves the right of reply!
    Use PM to keep in touch
    • SMcGill
    • By SMcGill 18th May 19, 10:45 AM
    • 10 Posts
    • 2 Thanks
    SMcGill
    • #8
    • 18th May 19, 10:45 AM
    • #8
    • 18th May 19, 10:45 AM
    Do home reversions still exist? This allowed people to sell a fixed % of their house value for a lump sum.
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