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equity release


big bad lindz
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I thought that paying taxes for all your working life would be contributing to your future health care.

It pays for the people currently in care, the roads, councils, social services and many many other things.

 

The top 3000 people in this county pay more tax than the bottom 9 million and there are many many people who never paid in but want out as much as they can.

 

Maybe the OP should sell off before then. My mother was a cook in a care home and said out of 20 residents only 2 paid the rest the council paid.

She said the 2 residents were turned sick by the amount of fuss that some (not all) residents made, demanding everything fresh and organic, they were out to get everything they could for nothing!

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Be very careful of which company you use. My late father signed up to one of these schemes,,, ...the valuation was very low and charges were very high with electrical, heating and plumbing checks annually.

That sounds very good advice, I have already been advised the valuation would likely be on the low side. I had not considered the small print WRT the amenities. :good:

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It pays for the people currently in care, the roads, councils, social services and many many other things.

 

The top 3000 people in this county pay more tax than the bottom 9 million and there are many many people who never paid in but want out as much as they can.

 

Maybe the OP should sell off before then. My mother was a cook in a care home and said out of 20 residents only 2 paid the rest the council paid.

She said the 2 residents were turned sick by the amount of fuss that some (not all) residents made, demanding everything fresh and organic, they were out to get everything they could for nothing!

 

It is also for your old age care and state pension. That is why you pay your 'stamp' throughout your working life. There was never any mention about having the rug pulled from under you once you retired.

 

One of the main problems is that care for the elderly has been privatised. Name one instance where privatisation hasn't lead to higher costs and / or lower level of services. If the OP has any wealth left when the time comes to go into a care home that will be taken from him. No chance of any legacy to the children so why not cash it in before the suits in the corporations get their hands on it?

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Like everything every circumstance is different and there can be good points and bad. Some years ago mother in law was advised by some of her friends to take a bit of equity out of her property to act as a bit of a buffer against potential bills. She didn't even need it. No one felt it was their place to get involved and tell her what to do with her finances so she borrowed £12,000 against the house. 20 years later that figure has now meant that the company has a claw back in the region of £50,000. How much will be left by the time that this is All sorted out one way or another is anyone's guess. Be thoughtful before you sign anything because once you have you will never get back out of the hole and if you spend up to the value of the house or the value goes down or it needs some sort of big expensive repair you could be in the more.

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I thought that paying taxes for all your working life would be contributing to your future health care.

 

You've obviously been out of the UK for a long time..?

 

We pay more in tax than most other European Countries, yet we receive much lower benefits at a far later age, we've been shafted big time by successive governments, (both Labour & Tory). :yes:

 

As regards Equity Release, I've always regarded it as a "last resort" by folks who, for whatever reason, have not made adequate provision for their retirement, but are likely to end up feeling pretty disgruntled by what they get out of the deal at the end of the day, I would be surprised if the majority consider it's been a good deal for them, with the benefit of hindsight..? :hmm:

 

Cat.

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5 years left on mortgage ,then living rent free for 5 years then 2 x 25 year goverment pensions kick in (me and the wifes).retire at 60 ,no state pension till 67. Will get beer money jobs to keep us busy ,then continue living rent free in our home as long as possible. Well thats the plan ,now watch some faceless civil servant mess it up ,lol.

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You've obviously been out of the UK for a long time..? Five years

 

We pay more in tax than most other European Countries, yet we receive much lower benefits at a far later age, we've been shafted big time by successive governments, (both Labour & Tory). :yes:Wrong on taxes - most including the UK pay around 19- 20% Right on Pensions, but then again; how many other countries pay as much in unemployment benefits?

 

As regards Equity Release, I've always regarded it as a "last resort" by folks who, for whatever reason, have not made adequate provision for their retirement, but are likely to end up feeling pretty disgruntled by what they get out of the deal at the end of the day, I would be surprised if the majority consider it's been a good deal for them, with the benefit of hindsight..? :hmm:The way things are going nobody could have predicted the shortfall in the pensions pot.

 

Cat.

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At work, our insurers have said we can do and involve ourselves in anything apart from equity release. It is the one single thing we can't get involved in, not even to witness a signature; and that is all I need to know that no one should touch it with a barge pole.

 

It is probably because it is the singular worst financial option possible for anyone and litigation inevitably follows once people realise it wasn't right for them and they have unecessarily hosed a shed load of cash away.

 

The best bit is there's an industry full of financial advisers who will push equity release (and will dress it up on paper as being suited to your needs when arguably it is not) and that is because there is so much commission in it for them.

 

At 60 years of age, considering equity release is genuinely the daftest thing I've heard this year. I'm glad you have asked the question on this thread so we can collectively talk you out of it.

 

There is a real problem at the moment as people live longer and don't have accesss to a traditional (family run, will be there next year) kind of financial advice. I have seen some absolute shockers (one leading to suicide) where people have been fleeced in financial / investment schemes.

 

Anything involving carbon credits, film / theatre production, air port car parking, storage / drop collection, gold / precious stones or mining abroad that isn't Rio Tinto, run away.

.

Edited by Mungler
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At work, our insurers have said we can do and involve ourselves in anything apart from equity release. It is the one single thing we can't get involved in, not even to witness a signature; and that is all I need to know that no one should touch it with a barge pole.

 

It is probably because it is the singular worst financial option possible for anyone and litigation inevitably follows once people realise it wasn't right for them and they have unecessarily hosed a shed load of cash away.

 

The best bit is there's an industry full of financial advisers who will push equity release (and will dress it up on paper as being suited to your needs when arguably it is not) and that is because there is so much commission in it for them.

 

At 60 years of age, considering equity release is genuinely the daftest thing I've heard this year. I'm glad you have asked the question on this thread so we can collectively talk you out of it.

 

There is a real problem at the moment as people live longer and don't have accesss to a traditional (family run, will be there next year) kind of financial advice. I have seen some absolute shockers (one leading to suicide) where people have been fleeced in financial / investment schemes.

 

Anything involving carbon credits, film / theatre production, air port car parking, storage / drop collection, gold / precious stones or mining abroad that isn't Rio Tinto, run away.

.

What do you do Mungler?

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I've just about done now paying a mortgage, life changes added another 6 years on my planned completion, but I've got it down to 1k owed now. Which I'll keep for a a while.

There's no way in this world of pigs pudding I'll start paying anyone anything to live in a house rent wise. Done and dusted, it's mine and nobody can take it off me (well there's the Mrs :-/) go back to pay out 500 a month rent ??? lol that's me beer money.

 

These equity release companies are nothing but yuppie loan sharks.

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I've just about done now paying a mortgage, life changes added another 6 years on my planned completion, but I've got it down to 1k owed now. Which I'll keep for a a while.

There's no way in this world of pigs pudding I'll start paying anyone anything to live in a house rent wise. Done and dusted, it's mine and nobody can take it off me (well there's the Mrs :-/) go back to pay out 500 a month rent ??? lol that's me beer money.

 

These equity release companies are nothing but yuppie loan sharks.

Selling your house to rent actually can make sense and better value than equity release.

 

Say your house is worth £300k and paid off but you've not got much in the way of a pension and you want some dosh to live off and go away on Saga tours etc.

 

If you're 60 and you make 90, you're renting for 30 years. If you could rent a comparable gaff for £500 a month then you're paying £6000 a year for a gaff which someone else will have to maintain and insure etc.

 

£6000 times 30 years is £180,000.

 

Factor in most won't do 90 and you might be able to get a 4 to 5% no risk return on your £300,000 and it starts to make more sense.

 

One of my mates parents, as soon as they hit 60 they sold their 4 bed detached house, moved into an over 60's retirement flat complex (for peanuts) and used the rest of the money to regularly get out to a cottage they owned in Italy. If you can bear the downsize, the thinning out of your physical possessions etc then it makes sense.

 

We all know an old couple / person rattling around in a 5 bed detached house using only a bedroom, kitchen and a lounge i.e. Only living in 3 rooms.

.

Edited by Mungler
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As usual for mung, if you are going to follow any advice here this is it. the voice of sensibility.

 

At work, our insurers have said we can do and involve ourselves in anything apart from equity release. It is the one single thing we can't get involved in, not even to witness a signature; and that is all I need to know that no one should touch it with a barge pole.

 

It is probably because it is the singular worst financial option possible for anyone and litigation inevitably follows once people realise it wasn't right for them and they have unecessarily hosed a shed load of cash away.

 

The best bit is there's an industry full of financial advisers who will push equity release (and will dress it up on paper as being suited to your needs when arguably it is not) and that is because there is so much commission in it for them.

 

At 60 years of age, considering equity release is genuinely the daftest thing I've heard this year. I'm glad you have asked the question on this thread so we can collectively talk you out of it.

 

There is a real problem at the moment as people live longer and don't have accesss to a traditional (family run, will be there next year) kind of financial advice. I have seen some absolute shockers (one leading to suicide) where people have been fleeced in financial / investment schemes.

 

Anything involving carbon credits, film / theatre production, air port car parking, storage / drop collection, gold / precious stones or mining abroad that isn't Rio Tinto, run away.

.

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Selling your house to rent actually can make sense and better value than equity release.

Say your house is worth £300k and paid off but you've not got much in the way of a pension and you want some dosh to live off and go away on Saga tours etc.

If you're 60 and you make 90, you're renting for 30 years. If you could rent a comparable gaff for £500 a month then you're paying £6000 a year for a gaff which someone else will have to maintain and insure etc.

£6000 times 30 years is £180,000.

Factor in most won't do 90 and you might be able to get a 4 to 5% no risk return on your £300,000 and it starts to make more sense.

One of my mates parents, as soon as they hit 60 they sold their 4 bed detached house, moved into an over 60's retirement flat complex (for peanuts) and used the rest of the money to regularly get out to a cottage they owned in Italy. If you can bear the downsize, the thinning out of your physical possessions etc then it makes sense.

We all know an old couple / person rattling around in a 5 bed detached house using only a bedroom, kitchen and a lounge i.e. Only living in 3 rooms.

.

I don't disagree but it really depends on the house value and your interest on the money in the bank. It's OK if you selling property at the high end 500k + then the interest will pay a substantial amount of you're renting. But low end 150k then you're going to struggle getting anything back not to eat into your pot. And you will obviously have the chance of eviction if you don't pay the rent, unlikely due to your lump some but still possible if things go pear shaped.

I just see, no mortgage, I can't be evicted so peace of mind there, all I need is money for fuel bills, some beer money, I have a couple of pensions to cover a fair amount of my needs. And then the government pension whatever that's going to give me.

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Selling your house to rent actually can make sense and better value than equity release.

 

Say your house is worth £300k and paid off but you've not got much in the way of a pension and you want some dosh to live off and go away on Saga tours etc.

 

If you're 60 and you make 90, you're renting for 30 years. If you could rent a comparable gaff for £500 a month then you're paying £6000 a year for a gaff which someone else will have to maintain and insure etc.

 

£6000 times 30 years is £180,000.

 

Factor in most won't do 90 and you might be able to get a 4 to 5% no risk return on your £300,000 and it starts to make more sense.

 

One of my mates parents, as soon as they hit 60 they sold their 4 bed detached house, moved into an over 60's retirement flat complex (for peanuts) and used the rest of the money to regularly get out to a cottage they owned in Italy. If you can bear the downsize, the thinning out of your physical possessions etc then it makes sense.

 

We all know an old couple / person rattling around in a 5 bed detached house using only a bedroom, kitchen and a lounge i.e. Only living in 3 rooms.

.

Not wishing to doubt you but can you tell me where you can get a no risk return of 5% on your cash?

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Not wishing to doubt you but can you tell me where you can get a no risk return of 5% on your cash?

I would also be interested in this.i found one with the nationwide that paid 5%.but only for twelve months and you could only put 500 a month in.then after a year it reverted to the normal rate.you might get that sort of rate if you are willing to take risks.

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I had a customer who signed up to equity release when her husband was alive, she said it was the worst thing they ever did, and that if she had another chance she would have sold up and moved to the smallest house in the cheapest part of the country.

 

Things like maintenance were her responsibility 100 percent, as when she rang the company with any issues, they would just ignore her calls.

 

No one has mentioned buying a holiday park static chalet, living there for the allowed 9 months then negotiating a 3 month stay at the travellodge or similar.

 

 

regards.

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I'm watching this with interest as it looks like a route I have little choice but to take soon. We are one of Teresa May's 'Jams' families - from council estate backgrounds: We Just About Managed - to buy our first house late in life and finish paying for it.

 

At 65 I have just reached the dizzy heights of receiving the first cheque of my state pension next month as our sole income. The Mrs will start drawing hers in two months. That's about £270 PW between us to pay our way in life.

 

The house needs some minor work doing to it - conservatory roof being the biggest thing to worry about, but we'd also like to have enough in the bank to pay our funeral costs when the time comes. We're constantly in minor debt that we simply cannot shake off, that sometimes means living on credit cards... with expensive long term interest anyway.

 

Now I'm retired I won't be able to carry on paying that out of our pensions. It's only a two bed semi so downsizing isn't an option - and we love it here and want to stay in our quiet little pile.

 

I'm aware the loan doubles about every 10 years but since the value of the house nearly trebled in the 17 years we've had it I think its value will continue to rise at a broadly similar rate. Though I feel shame at having to draw from the kids potential inheritance it will hopefully still set each of them up with a tidy sum towards their own house payments in years to come... assuming they even manage to get on the property ladder that is with house prices rising the way they are.

If your kids are working why not let them take the roll of a equity release company, they could offer to buy it from at a reduced market value, they would then benefit from its sale when you pop your clogs, it would also stop it being taken from you and the proceeds used for your upkeep in a nursing home should you end up in one.

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Off the top of my head I honestly can't think of a set of circumstances where equity release is the right way to go.

 

Saying that, if you don't want to move / sell your home then (obviously) there aren't that many options at freeing up the capital locked therein.

 

Retirement flats and parks are a growth area but there are plenty of rogue schemes / operators out there and sometimes there's little or no security of occupation.

 

It's a bit frightening to think that you could retire at 65 and live another 30 years but on what?

 

Those baby boomers with their final salary schemes and retirement at 55 / 60 - it sounds like Greece now

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If your kids are working why not let them take the roll of a equity release company, they could offer to buy it from at a reduced market value, they would then benefit from its sale when you pop your clogs, it would also stop it being taken from you and the proceeds used for your upkeep in a nursing home should you end up in one.

That is now known as a 'deprivation of assets' and can result in the local authority putting a charge on the house for the care costs associated.

 

Not having a dig or anything just thought you might like to know what they could do.

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Hi Guys,

 

Thanks for all your comments, some interesting reply's I didn't think it would have generated such a response and thanks to those who have sent me a PM or two.

 

Just to maybe clear up a couple of things.

 

We bought the building plot and additional land 16 years ago and built the house. We have approximately 2 acres mostly grass and trees and a large vegi patch. We shed a lot of blood sweat & tears during the build and we don't want to sell up but would like to enjoy what we have, while we are still fit and able to.

As the house is in a rural area where we currently have 4 or 5 similar size houses for sale and have been on the market for a long time, I think selling and downsizing would be very unlikely, although we could rent but having 3 golden retrievers who are first & foremost part of our family means that we would need a suitable sized house for them as well.

We don't have any children that we need to leave our estate to but we need to look at our long term future and hopefully make plans accordingly.

 

Although I am considering stopping work offshore I most likely would need to find something to bring in a little beer money or at least cover my shooting costs but it was a thought that releasing some of the equity could possibly give us a buffer along with my pension pot.

 

We don't intend to jump in without some research and intend to look at our options in the new year and as has been suggested take some good legal advice.

 

Again thanks and all the best for 2017

 

BBL

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Off the top of my head I honestly can't think of a set of circumstances where equity release is the right way to go.

 

Saying that, if you don't want to move / sell your home then (obviously) there aren't that many options at freeing up the capital locked therein.

 

Retirement flats and parks are a growth area but there are plenty of rogue schemes / operators out there and sometimes there's little or no security of occupation.

 

It's a bit frightening to think that you could retire at 65 and live another 30 years but on what?

 

Those baby boomers with their final salary schemes and retirement at 55 / 60 - it sounds like Greece now

my neighbour who is nearly 90, is an ex deputy head, he retired at 55 on full pension, its index linked naturally, add his state pension and he is having a great life. it actually seems unbelievable, but fair play if you can get it.

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