Equity release is a common way for people looking to have a financial plan for retirement to guarantee an income. By releasing equity from an asset, usually one’s home, the lender then gives an income for the remainder of the customer’s life. The disadvantage to this is that upon the death of the borrower (or after a pre-agreed amount of time), the money must be repaid which often means the sale of the house. However, equity release comes under a lot of scrutiny from those who suggest that is not a morally acceptable product.

As the home is sold to repay the lender after the customer’s death, this often comes under criticism from those who disagree with equity release. For a number of reasons, this is seen as morally questionable; the most commonly used argument being that it removes the family home from the estate of the customer. Families often keep a home within the family circle for either financial or sentimental reasons, and equity release means this is no longer an option.

A criticism that could be, and often is, made of equity release is also related to inheritance. As the home is sold in order to repay the lender, it reduces dramatically the assets which can then be inherited through the borrower’s will. It is also criticised because having an income from equity release schemes means that those previously entitled to benefits may find that the amount they are eligible to claim is reduced or eliminated altogether. Those wishing to sell their home further down the line, or change equity release schemes for any reason may also find these processes complicated or difficult, which also can cause people to regard such schemes negatively.

Despite the negative press surrounding equity release, there are many benefits that make it a viable and helpful way to ensure financial stability in later years. For those without a pension or other source of income, it gives them the income they need to remain comfortable after retirement. Another benefit is that while the home is sold after the borrower dies, they can still remain in their home until that point, meaning that they don’t have to deal with the upheaval of having to move homes.

Although there is a small amount of disapproval of equity release, the fact remains that many people still choose to take the opportunity to release cash from their homes every year. As long as the borrower is aware of any potential downsides, it is an excellent way to take advantage of the equity available in their homes.

With so many different equity release schemes on the market, it’s important to seek expert advice!

When thinking about your future it can be a good idea to think about your retirement and financial stability, no matter how far away that might seem. Although only those over 55 can purchase an annuity, it is still prudent to look at your options ahead of time to ensure a good deal in our current financial instability.

There is a general consensus that planning for your retirement – and therefore researching annuities – is something you should plan for well before your retirement to ensure that you receive the best possible advice in plenty of time. While many online financial advice sites advocate starting to plan your annuities five years before you retire, realistically this process can be started many years before.

There are several grounds for researching an annuity and organising your finances for after retirement long before you reach retirement age. One of the most obvious stems from the fact that the longer in advance you save for retirement, the more assets you will have when it comes to purchasing an annuity later on. Despite the fact that paying into a pension during your working life also means you will have money for an annuity, many people choose to purchase one separately; in this case, planning in advance means you have time to amass a lump sum necessary to purchase an annuity when the time comes.

Falling rates for annuities also mean it is crucial to plan your finances in advance. Annuity rates are affected by interest rates as insurers base their rates on how well their own investments are performing, meaning that in our unstable financial climate annuity rates have fallen considerably. Other factors can also affect the rates of annuities, such as increasing life expectancy. In this way planning ahead means making yourself aware of the potential further falls in annuity rates.

Although the cut-off age for purchasing an annuity is 75 years, by researching and even purchasing in advance you can increase your income from the annuity by up to 10% in some cases. Many people stick with their pension provider for an annuity which may not always be the best option; exploring other companies and plans can increase your income considerably, so leaving enough time to research all these options before you retire is a better way to ensure financial stability in retirement.

The sooner you start to research annuities, the more prepared you will be when you reach retirement.