With the cap on energy prices set to rise again this autumn and early next year, the cost-of-living crisis isn’t over yet. Homeowners who are struggling to pay their bills, or enjoy the same lifestyle as before, may need to consider how to increase their cash flow.
Unfortunately, those on a fixed income – such as retirees – can’t rely on landing a better job or a promotion to fill the gap. To make matters worse, many older people also support children and grandchildren battling rising bills, house prices, and inflation.
Equity release could be one answer to this knotty problem, as well as helping with other long-standing issues such as care costs, interest-only mortgages, and a small pension pot.
Equity release works by borrowing money secured against your home, which is usually paid back when your home is sold after your death or when you move into residential care. This is also known as a lifetime mortgage, though other options are available.
However, unlocking money from your home has drawbacks, such as reducing the amount your beneficiaries will inherit from your estate, and affecting your entitlement to means-tested benefits. If you’re already receiving council-funded care in your home, you may have to pay more after you release equity.
Before making any major financial decision, we highly recommend talking to a qualified advisor. We’re also on hand to discuss other options, such as downsizing or improving your property’s energy efficiency to reduce your bills.
Contact our team anytime for friendly advice tailored to your unique situation.