Free guide to finding the right financial solution in retirement now available via www.saga.co.uk/equityrelease
Equity Release should only be considered when alternative routes are ruled out
Following the launch of the Saga Equity Release Service by Saga Personal Finance in January this year, the over 50s experts have now published a free guide for homeowners who may be considering equity release as a way to help fund their retirement, entitled "Affording the Life You Would Like in Retirement".
Saga firmly believes that opting to cash in some of the equity in your home is not a decision that should be taken lightly, and is concerned that there could be many people offering advice in this area who are concentrating on the product itself and not on the specific individual needs of each customer. The equity release market is highly specialised; anyone offering advice must have appropriate qualifications and expertise. The guide has been designed to outline all the options available to homeowners with large amounts of equity in their homes, in order to illustrate that there are often better, more suitable ways to raise cash in retirement, and that these should always be considered before equity release.
For example, homeowners with a regular income could look at finding a good deal on a loan that's secured against their property, which often results in better rates. Or they could look to cash in some investments they may have or consider downsizing to provide access to the funds they require.
Saga's guide explains in detail the different types of equity release schemes, including lifetime mortgages (interest-only mortgages and rolled-up interest loans), home reversion schemes and home income plans, and outlines the different benefits and risks associated with each. It also gives clear and concise examples so that homeowners can see exactly how these schemes work in practice, rather than just being bombarded with complex jargon.
Andrew Goodsell, Chief Executive of Saga Group Ltd, said: "Of course, under the right circumstances, equity release can be a great way to access assets to help fund a more fruitful retirement, but it's not for everyone. We are concerned that too many retired people could be jumping into equity release without first considering the consequences and it's absolutely crucial that they seek specialist financial advice first. "
Homeowners can access the free guide, 'Affording the Life You Would Like in Retirement', by visiting http://www.saga.co.uk/equityrelease, or by calling 0800 015 6256.
For further information:
Saga Group Communications Manager
Tel: 01303 77 65 40
About the Saga Equity Release Service:
Saga has teamed up with leading specialist equity release advisers Just Retirement Solutions (JRS) to create the Saga Equity Release Service. Specialist JRS advisers assess each case individually, including provision of a full state benefit analysis, and explore all the options available. Where equity release is appropriate, a one off flat fee of 349 is payable regardless of the size of the loan. The panel of lenders is made up of leading providers including Northern Rock, Mortgage Express, Scottish Widows and Just Retirement Limited. Where a lifetime mortgage with rolled-up interest is appropriate, only products with a no negative equity guarantee are recommended. All JRS advisers hold the CF7 qualification and are dedicated to Equity Release advice.
A cash lump sum and/or income from an equity release scheme may reduce the consumer's state benefits.
With roll-up mortgages the outstanding loan including the added interest can grow very fast and if the total rises to more than the value of the property, this would result in a negative Equity. To protect against this, where a lifetime mortgage is appropriate, Saga's advice service will only select products with a no negative equity guarantee.
If a lifetime mortgage is considered appropriate, to understand the features and risks, customer should ask for a personalised illustration.
An equity release scheme will reduce the value of the consumer's estate