Equity Release can be a powerful tool for helping people meet their financial objectives in later life. However, the potential advantages of Equity Release have taken on a renewed significance in light of the current global economic climate, here we explain why. 

What’s happening in the markets?

The past week has seen some big shifts in the financial markets as shareholders respond to fears over how the economy will be able to stand up to the coronavirus pandemic. Despite central banks taking measures to try and mitigate the impact, investors are concerned that the banks now have few options left. Markets have sunk to lows not seen since the Black Monday 1987 crash.

The effect of all this on individual investors is a reduction in dividends, a reduction in yield on fixed interest investments, and negligible returns on cash deposits. The big question now is how long these lows are set to last. Whilst historically, markets have always rallied fairly quickly after a significant drop, we’re in uncharted territory with coronavirus and the drastic measures being implemented by governments to try and stem the spread of the virus.

So, with returns suffering, and the potentially wider issue of business owners struggling or people facing job losses, how can individuals protect themselves financially in these uncertain times? One way is to shore up income using alternative means. 

How could Equity Release help?

One option open to homeowners over the age of 55 is taking out a Lifetime Mortgage. A Lifetime Mortgage is an Equity Release arrangement that allows people to access wealth within their property without having to move. It does not require monthly repayments and interest on the loan is rolled-up. The loan and interest are only repayable when the individual dies or moves into long-term care.

Many people have more than half their wealth tied up in their properties. They often invested in property rather than paying extra into their pension, for example. In most cases, this will have been a good decision with property proving a great investment. Now could be the time to take advantage of that decision.

Accessing equity held in property can help bear part of the financial strain which people may be facing. Whilst a regular Lifetime Mortgage enables individuals to access a lump sum of cash, there are also drawdown options which can be a very effective way to fund income. Clients can release a smaller lump sum from their property with a cash facility that they can draw down from as and when it’s needed. Given all the unknowns we are currently facing, the flexibility that this option affords could prove very attractive.

How can we help?

It’s vital that anyone considering Equity Release gets professional advice before making any decisions. Our fully qualified team is perfectly placed to offer that support. Our background in financial advice means that we understand the bigger picture. Working closely with accountants, lawyers, banks, wealth managers and other trusted advisers, our solutions form part of each client’s wider planning objectives.

We often succeed in finding a suitable solution where others have not, so please get in touch with the team to find out more. Given the current situation, we are more than happy to conduct your appointment over the phone or video call rather than face to face.