Has anyone taken out an Equity Release plan?

Saga is offering contact with Just Retirement Solutions which, as far as I know, is completely independent and Saga is not providing equity release itself.
As for those 'cheaper' houses for the 60+ these are where the buyer has bought a share and pays rent on the rest. When sold the buyer or their estate gets a proportion of the sale representing their initial share.

Aunt of the wife's died a couple of years ago and there was equity release on the house. She left three adult children, one of whom lived in the house at the time. House was sold to pay the Equity Release and money shared out. The one who was living there at the time moved to the coast and took early retirement. Doing OK by all accounts. It was only an

ex-railway cottage.

Equity release is highly regulated and for that the punter pays because such deals are only available via financial consultants charging £2000 upwards........however, should you consider that you may live a long time and thereby end up spending all you have, on some lacklustre care, while the person in the next bed pays nothing, it may be the right time to go on a world cruise and enjoy yourself.

My DM & Step-F took out Equity Release about 20 years ago, I don't know how much will be left over after house is sold, Step-F died 18 years ago & myself & DD inherited his share in the property. I know they took good Independent advice before taking it out, our opinion was why shouldn't they have an easier retirement. If we're left with nothing then so be it. Doubt there will be much in the Bank/Building Society so there is only value of the house. Step-F & DM have had a comfortable retirement, not lavish lifestyle but no worries about occasional holidays(not world cruises). DD & I have no expectations so we won't be disappointed

My only advice is get some good Independent advice before making any decision.

PLEASE DO NOT DO IT bee63! You have to insure your house, keep it maintained to certain spec and all the time interest is rolling up. I got extensive quotes for various plans but all were pretty much of a muchness and typical figures were if I pulled out 60k now by the time I was 85 (in 18 years) and maybe ready to be carted off to a care home (or worse lol!) I would owe a whopping 280k! Obviously, the more you take out the greater the end figure. Do your sums but be super wary

I know two people who have done this and bitterly regretted it - one family tried to buy their mother out of the scheme, and couldn't afford it after a very short time . Presumably there must be some decent companies because there hasn't been a national scandal, but I would be very, very wary.

My house is not worth enough to down size. I have no relatives so I intend, when I need to, to take money out of my house. Otherwise it will be spent on a care home, or not.

Download the Age UK Factsheet Equity Release it is Factsheet nos 65 which will give you all the basics to look out for as there are alot of pitfalls but in the right circumstances can be a good thing. Only you can judge what is right for you but be armed with all the facts first. Good luck.

I'm sure there's more to them then meets the eye. I bought a bungalow off a couple who did this and when they became elderly and frail went to live with their daughter. When they passed away there was barely enough money left to bury them.
Those houses for the over 60s only - would I be right in thinking that they're probably lease-hold - so that the builders can go on selling them again and again, becoming very rich on the proceeds?
Sorry to sound so damn cynical but experience has shown me that many of these schemes are only really for the benefit of the seller, not the buyer. Tread very carefully would be my advice.

When I think of the huge interest rates we had to pay when first buying a house 40 years ago, and believe you me it was a struggle with our relatively small salaries. After 25 years we must have paid over double back to our mortgage society. What does it matter now about how much interest we'll have to pay on equity release as I would imagine this period would be in reverse order to our first ever mortgage. Our 2 adult children have a decent income, a large house each and all the gadgets you could imagine. Why in our later stages of life would we not want to be more financially fit to carry on in the lifestyle which we've been used to. As someone said previously the state will get most of any savings or property should we need residential care.

lovebeige the properties for sale for over 60's aren't leasehold or at least ours isn't.

We're currently selling a property and I was surprised to see that the two adverts produced by the estate agents had two prices... one for the 'regular' price and.a cheaper price for over 60's. We were unaware that our property was going to be marketed in this way and we won't gain financially from it but it doesn't bother us in the slightest.

Elizabeth, it's unlikely that any money you have to pay for care in future will go to the state. The vast majority of care homes are now private, ditto many of the agencies that provide in-home care.

As for cheaper homes for over 60s, I've sometimes seen these advertised, and it's usually been a 'lifetime lease'. In other words, once you're gone they take it back.

Actual retirement properties are often cheaper to buy than others, but then from all I've heard they can be very difficult to sell (which may be important if anyone should later need to sell to fund residential care) and often high service charges still need to be paid even if the place is empty for months on end.
Also, the high service/maintenance charges can be off putting to many older people on tight budgets, which is another factor that may make them difficult to sell.

There are retirement flats for ale where I live, and I used to fancy the idea, until I discovered that you have to pay over £400 for 2 meals a day - which you have to pay whether you want the meals or not! - that's in addition to the usual service charge.

I would say to be avoided, if there is any other action you can take. If you do decide to go ahead, see an independent financial adviser, look at Age UK Fact sheets.

A wealthy friend has used equity release to make major contributions to her grandchildren's house purchases. In her case she reckons the interest on the loan would otherwise go to the government in inheritance tax, any way, so she and her family are no worse off.

Be aware that if you use equity release to boost your income it can affect your entitlement to benefits. So make absolutely sure you are receiving all the benefits you are entitled to and how much you will lose through taking income from your equity release scheme.

When we moved south from Scotland we had never heard of the lower house prices for Over 60s so we asked a reputable local estate agent to explain it. His advice was don't touch it! He said it would be better to buy a smaller house and pay the full price! The best scheme for equity release is to downsize.

Message deleted by Gransnet.

It's not hard to see why equity release has become big business. People are living longer so need more money to support them through their twilight years.
If, once you've exhausted all these, your pension still won't stretch far enough, you need to look into alternatives.
And our homes are where most of us hold the main portion of our wealth. According to Halifax, the average house has risen in value by 236 per cent over the past 20 years.
Those living in London and the South East have seen even more dramatic increases — with property in the capital rising by 402 per cent over this period.
The question for homeowners is what is the best way to turn this into hard cash?
The traditional route has been to sell up and move somewhere cheaper to release funds. This can be the most cost-effective option over the long term, even taking into account estate agents' fees and stamp duty.
But many may be reluctant to leave the family home, and it may be impractical to move somewhere smaller, or further away from family and friends.
Equity release mortgages allow people to access some of the money locked up in their property without moving house.
According to Halifax, the average house has risen in value by 236 per cent over the past 20 years with property in London rising by 402 per cent over this period+2
According to Halifax, the average house has risen in value by 236 per cent over the past 20 years with property in London rising by 402 per cent over this period
Homeowners have to be 55 to take one out, although industry figures show the majority are sold to borrowers in their 70s.
Equity release mortgages are loans secured against your property, giving homeowners a cash lump sum, or the ability to draw down money in stages.
The key difference compared with a conventional mortgage is that you don't have to make repayments during your lifetime, although some newer products allow you to do so. An equity release isn't repaid until the second spouse dies or goes into care.
Interest charges can be substantial. The Bank of England base rate may be at an all-time low of 0.25 per cent, but the average equity release charges 5.3 per cent, according to the Equity Release Council.
Charging can vary though — the cheapest deals charge 3.73 per cent, while the most expensive charge 6.78 per cent, according to Dean Mirfin of Key Retirement. The average amount taken out via an equity release scheme is just over £70,000.
Free investing guides
At the average interest rate of 5.3 per cent, your debt roughly doubles every 14 years. So if you take out a loan of this size at the age of 65 and live to 93, the amount owed will balloon to £280,000 over these 28 years.
Unlike conventional mortgages, there is no end-date on an equity release mortgage. Of course, people will be hoping that house prices continue their upward trajectory, and rise at a faster pace than the interest added to their loan.
But there is no guarantee of this. Even with modest house price growth, over time this debt is likely to seriously erode the equity in your home.
This can create problems. For example, it is likely to significantly reduce any inheritance you leave behind, although this may not be an issue if you don't plan to leave a legacy, or are worried the value locked up in your home will spent on care fees.
Equity release can also restrict your ability to move, particularly if illness or disability means you need to.
However, newer products are becoming more flexible. The Equity Release Council says almost half of plans sold now include 'downsizing protection', which allows a customer to move to a smaller property and pay off the loan without incurring penalty charges. But don't expect these more flexible products to offer the most competitive interest rates.
All regulated equity release mortgages come with a 'no negative equity' guarantee. This ensures children or surviving family members won't owe money if the house sale doesn't clear the outstanding debt.
This is why there are restrictions on how much you can take out. For example, if you are 55 you can only borrow up to 26 per cent of the value of your home.
At 75, this increases to 48 per cent, and by 85 people can unlock 54 per cent.
Taking out an equity release plan may affect your tax situation and eligibility to state benefits, so seek financial and legal advice (expect to pay around £2,500 for this).
An adviser should also be able to help you find the most suitable product. Some equity release mortgages offer 'drawdown' facilities, for example, which give you the option of drawing money in stages, which can reduce overall interest charges.
Others allow you to make early repayments or pay off interest without incurring penalties.

Today's news - hope this information helps folks to understand equity release a little more and to make decisions which suit them best.

I've recently see some of those 'over 60s lifetime lease' houses for sale in dds' area, Oxford. They look like a pretty bad deal to me, though if you weren't bothered about leaving an inheritance and wanted to downsize to one, it might well be viable.
I haven't seen what happens if the buyer eventually needed to fund a care home. Anyone know?

I wouldn't touch these plans unless I had no one to leave my estate to.
If I needed the money I would downsize or sell and rent, or ask the children if they wanted to buy a share of my house now with them getting it upon my demise.