Unlocking the wealth in your home Print E-mail
Written by Jonquil Lowe, 2006   
Page 2 of 2


For example, local authorities can make loans and grants for essential home repairs. If you are a couple living together, any equity release scheme should be chosen to continue until the second of you dies or moves to a care home, so that you both have the security of being able to live in the home for as long as you need. If you jointly own the home, the equity release scheme will affect the inheritance that each of you can leave. So it’s important that equity release is a joint decision.

Be clear from the outset what will happen if your circumstances change – for example, if you want to move house. Many schemes can be transferred provided your new property is suitable. But properties deemed unsuitable often include, for example, sheltered housing.

Check the obligations placed on you as a condition of either the mortgage or the tenancy agreement that forms part of a home reversion scheme. You will normally be required to keep your home in a good state of repair and to let the scheme provider inspect the property.

Are equity release schemes safe?

Before entering into any equity release scheme, it is essential to get independent professional advice from a solicitor, who will check the legal aspects of the contract. Find an independent financial adviser who will check the suitability of equity release for you and can recommend the most appropriate scheme and provider.

Lifetime mortgages are regulated by the FSA, which sets rules about how they can be advertised, the information you must be given and standards of advice. If something goes wrong you have access to the Financial Ombudsman Service and a compensation scheme if you are badly advised.

Home reversion schemes are due to be regulated by the FSA in a similar way from 2007 onwards. In the meantime, many are covered by a voluntary code of practice run by Safe Home Income Schemes (SHIP). To benefit from these rules or the voluntary code, make sure you deal only with FSA-authorised firms and members of SHIP.

Jonquil Lowe is a freelance financial researcher and journalist and author of Money in Retirement published by Which? Books.

Useful contacts

To check how your benefits or tax might be affected and for information on grants:
Citizens Advice Bureau
See Phone Book
www.citizensadvice.org.uk

To find out about grants, contact your local authority (see Phone Book).

For free detailed fact sheets:
• FS12 Raising income or capital from your home
• FS13 Older homeowners: financial help with repairs and adaptations
Age Concern
Tel: 0800 00 99 66
www.ace.org.uk

To check a firm is FSA-authorised:
FSA Register
Tel: 0845 606 1234
www.fsa.gov.uk/consumer
(follow link to the Firm Check Service)

To check which firms belong to SHIP:
Safe Home Income Schemes (SHIP)
Tel: 0870 241 60 60
www.ship-ltd.org
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