There may be ‘cash in your house’, and if people think carefully and take good advice before making use of it, then equity release can be of great benefit.
However, says expert legal adviser and Wilkin Chapman senior solicitor Caroline Shaw, people must look at all options available to them and be clear of the long-term outcomes of using it as a method to free up cash.
Caroline, whose firm is a member of the Equity Release Council, was speaking after last night’s ITV show Cash In Your House: Deal or No Deal? featured the practice, which is now thought to be responsible for releasing around £5 billion a year from peoples’ homes in the UK.
In an ITV Tonight series survey undertaken for the show, it outlined how fewer than half of people aged 45 think they will retire with a large enough pension pot. This, it said, may be a reason why people are turning to equity release – with mortgages paid off, they can free up cash tied up in property to either bolster their own funds, or support family. It added how a growing number of people aged over 55 are now becoming known as the ‘bank of gran and grandad’ as they help grandchildren financially.
Highlighting the benefits, the show cited case studies, including a group of four women who did seek proper advice about the possibility of equity release – and said they were considering it. Then there was a woman who used the practice to help fund her husband’s care and a divorced man who released money, after being advised by the UK’s largest debt charity Step Change.
Caroline is one of six designated equity release legal advisers that work in each of Wilkin Chapman’s six offices and repeated the show’s advice, stressing how people should take good advice and ensure they were aware of the advantages and disadvantages.
Interest rates and the impact their fluctuation can have on the amount paid back was one emphasis of the show and Caroline said:
“This is an important point, but at the present time, the financial experts say that the rates are down at between three and four per cent.
“One of the biggest issues for people is that, with more than 300 products on the market, they must get the right advice to ensure the product is right for them. While equity release undoubtedly provides answers for many people, it is not for everyone,” she added.
As part of the equity release process, people must seek legal advice which is independent of the companies they are dealing with. As members of the Equity Release Council, Wilkin Chapman solicitors can provide that in the form of face-to-face meetings.