Most people have a few financial decisions to make when approaching retirement age.
Some leave these decisions until after retirement and then find that with only a small pension and few savings finances will be difficult in the future.
If they own their own property they may be eligible to take advantage of an equity release scheme which allows them to use part of the value of their property as either extra income or as a lump sum.
It is quite usual for the owner's property to be the single most valuable asset they have and as they get older need some extra income to allow them to have a more comfortable way of life.
Schemes such as lifetime mortgages or home reversion plans give them the opportunity to release funds out of their property so they can enjoy life during their remaining years.
If you wish to participate in such a scheme there are a few things to consider.
You need to be over 55 years old and the property must be in good order with any existing mortgage paid off or at least be very near the end of the mortgage term.
The older you are the more equity you are able to release.
An 80 year-old would be able to get up to about 40% of the value of the home whereas a younger person of say 60 could be limited to about 20%.
There are advantages and disadvantages with lifetime mortgages and home reversion schemes and they may not suit everyone.
The advantage of being able to have a lump sum or a regular monthly income can be attractive to many and save the necessity of having to move house.
Schemes such as these are available from reputable providers, always check that the company is a member of the Safe Home Income Plan, and will guarantee that you are able to stay in your home until you die or go into long-term care.
One of the disadvantages is that the amount you are then able to leave to your family and friends will consequently be reduced.
There may also be changes in tax regulations and you may be ineligible for means tested welfare benefits.
Whatever decisions you plan to make it is essential to take the advice of a professional independent financial advisor who will work with you and examine your overall financial situation to advise you as to whether an equity release plan is the most suitable solution for you.
Independent financial advisors are able to give you information on what plans are available.