Warnings about equity release

In 2006 over £1.15 billion in equity was released in the UK from people's homes. This can be the ideal way for some to secure their financial future. However, it comes with a big warning - make sure you fully understand equity release.

Just remember most companies selling you this type of mortgage are doing just that. Selling. Like any business you market, advertise and sell your product in the best possible light. While glancing over the negative aspects.

Here at Seniors Discounts we want to give you an unbiased and fair view, so you can make up your mind without being persuaded by glossy marketing and sales pitches.

Before you consider starting an equity release scheme make sure you're able to answer the following questions:

• How will releasing equity affect your State benefit entitlements


• Does it affect your income tax


• Could it affect your options in the future - owing money to an equity release company could leave you short of capital if you wanted to move to a smaller property or needed money for long-term health care


• If the money is being invested understand the return on investment - this can be high risk


• How much money will you be leaving to beneficiaries - children and grandchildren


• How will inflation affect any income you receive


• What fees are charged - set up, annually and early repayment charges should all be reviewed


• What is the risk of losing your home


• What happens if you cancel


• What occurs if you decide to switch equity release schemes

For more information regarding equity release we recommend you read the FSA's "Just Facts" guide to equity release

Now you're armed with knowledge you can make an informed decision on whether equity release is right for you. If it is we have listed some of the more popular equity release providers to help make your search easier.

Aviva equity release
Prudential equity release
Northern Rock equity release

PLEASE NOTE: The above companies are leaders for providing equity release within the UK. However you can only select from the equity release products they offer. Seeking advice from a financial advisory firm is prudent.