We use cookies to allow us and selected partners to improve your experience and our advertising. By continuing to browse you consent to our use of cookies as per our policy which also explains how to change your preferences.

Close
Menu
Home care
Find out about care at home, adaptations and technology to help you stay independent in your own home for longer.
Financing care
Learn about funding options for home care, home adaptations and care homes, together with Attendance Allowance, gifting assets and Power of Attorney.
Housing options
Consider your options and learn about sheltered housing, retirement villages and care homes.
End of life
Guidance to help you through the emotional and practical steps of losing a loved one, from coping with bereavement to arranging a funeral.

Top tips when considering equity release

Use our equity release practical checklist to guide you towards deciding if taking out a scheme is the right thing for you.
3 min read
In this article
Is equity release right for you? Other considerations Questions to ask a potential provider
Downloadable top tips checklist

Is equity release right for you?

 

Before going any further, take the following three important steps.

1

Think carefully about all the other ways cash for care could be raised – including property downsizing, using savings, renting a room, local authority funding and possible benefits, such as the Attendance Allowance – before making a decision about equity release.

2

Use our cost of care and eligibility checker to find out how much money you might have to pay each year for care at home.

3

Take independent financial advice from a specialist accredited later life adviser, such as a fully listed member of the Society of Later Life Advisers (SOLLA). 

 

Society of Later Life Advisers (SOLLA)

By choosing an accredited member of the Society, you can be assured of someone with the expertise to best understand your needs to provide advice that is right for you and your family.

societyoflaterlifeadvisers.co.uk

For advice and information, call:

0333 202 0454

 

You could also contact StepChange, a service offering free guidance on equity release.

StepChange

Free advice from a charity-operated equity release service.

stepchange.org

For advice and information call:

0808 168 6719

Mon–Fri, 9am–5pm

 

For more guidance on finding an IFA, see how to find a financial adviser in Which? Money.

4

Choose a provider that is a member of the Equity Release Council (ERC) as they will have to abide by a Code of Conduct, and their plan will have a No Negative Equity Guarantee (NNEG). This guarantees that the total sum payable (borrowed plus interest) will not exceed the ultimate sale value of the property.

Which? Money Helpline
Get free one-to-one guidance on money matters relating to paying for care. Call Mon–Fri, 9am–5pm to speak to one of our experts.

 

Other considerations

Checklist (ticks)
  • Do you want a lump sum or an income? Equity release schemes are most suitable for borrowing money long term – they aren’t suitable for short-term borrowing.
  • Do you claim benefits? Or might you do so in the future? Releasing equity as cash could affect your entitlement to means-tested benefits, such as Pension Credit.
  • Don’t borrow any more than is needed. Interest rates tend to be high and can really add up over time.
  • Are property values likely to increase or decrease? Falling prices will not adversely affect you if you have a home-reversion plan, but it could affect you severely with a lifetime mortgage.
  • There will be additional costs involved in ‘arranging’ an equity release: for example, solicitor, valuation and administrative fees. Enquire about these up front so you know what to expect.
  • Do you want to leave any money in a will for relatives, such as grandchildren? If you’re going to release equity on your home, the amount you have in your estate will be reduced.

 

Questions to ask a potential provider

  • Will they let you transfer your plan to another property, should you wish to move or downsize?
  • Is there an early repayment charge should you want to pay off the plan early (for example, if you move to a care home or sheltered housing)? Penalties for early repayment can be high, so it’s important to be aware of what these are.
  • If necessary, will you be allowed to have other people live with you (such as live-in carers or family members)? Some home reversion schemes may have conditions to prevent this.

Downloadable top tips checklist

Top tips when considering equity release
(pdf 35 Kb)
Download

 

Further reading

Equity release for care at home

Equity release can release capital to help pay for care at home, but it isn’t suitable for everyone. We explain the ...

Paying for home care

We explain the options for paying for care at home, from local authority support to paying for it yourself, known as ...

Last updated: 13 Nov 2018