This means schemes by which a company provides you with an income in return for an interest in your property when it is sold after you have died. Any excess after interest and capital has been returned to the company goes into your estate.
The then Director General of Age Concern England had the following to say.
Age Concern’s assessment
To be eligible for most schemes you should be aged 55-70, have a property that is worth at least £30-40,000, and ideally be a freeholder. If you meet these conditions, questions to ask before proceeding to invest in any scheme are:
•Does the scheme allow you to move house if you need to move into sheltered housing or need residential care, or move to be nearer to your family?
•What is your life expectancy? People in their 60s and 70s usually benefit most from monthly cash payments.
•What are your family expecting to inherit on your death? The condition of most schemes is that they sell your home when you die. So if you use your property for home equity release you will not be able to leave it to your family, and will reduce the total value of your estate on your death.
•Are you living with a younger partner, relative or friend? Depending on the terms of the scheme, they will need to find alternative housing in the event of your death.
•What is your eligibility for means-tested benefits? If you receive cash from a home equity release scheme this may cancel out your eligibility for means-tested benefits or help with paying for care.
The information which we provide through Lasting Post is in outline for information or educational purposes only. The information is not a substitute for the professional judgment of a solicitor, accountant or other professional adviser. We cannot guarantee that information provided by Lasting Post will meet your individual needs, as this will very much depend on your individual circumstances. You should therefore use the information only as a starting point for your enquiries.