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Talking to Your Family About Equity Release.

How to Involve Your Family in Your Equity Release Decisions

Equity release is a huge life decision that shouldn’t be taken lightly. It has an impact on your immediate family – with both positive and less advantageous outcomes. That’s why it’s important to involve your loved ones in your equity release decision process.

Let’s take a look at how to include your family in this life decision – and why it’s important to do so.

Why Your Family Might Not Support Equity Release

Some family members might be wary of equity release because they’ve heard horror stories about it. Back in the 1980s, equity release got a bad reputation – but since then, and especially with the introduction of the Equity Release Council, it’s become a viable and reputable financial strategy for older people.

Equity release can also mean your family receive less inheritance when you pass away. The Lifetime Mortgage is repaid through the proceeds of the sale of your property – meaning there’s a smaller percentage left for your family to inherit.

However, you can use your tax-free lump sum to help your family financially before you die – so they won’t be missing out, after all.

1. Tell Them Your Reasons for Considering Equity Release

There are many reasons people opt for equity release. Some simply want a more comfortable retirement – while others want to bestow a ‘living inheritance’ on their family and share in the joy of major life events.

Weddings, university, and buying a first house are all costly steps in our lives – and one that grandparents often want to help out with. Involving your family with equity release decisions will help you to show them why you want to enjoy sharing your capital with them while you’re alive – instead of leaving them an inheritance.

2. Outline the Advantages of Equity Release

Walk your family members through the advantages of equity release, such as:

  • A tax-free lump sum to live comfortably in retirement
  • Additional capital to financially support family members
  • The capital to renovate and improve your home to live independently for longer
  • The ‘no negative equity guarantee’ – you won’t have to pay more than your house sells for
  • The right to remain living in your home until you pass away or go into long-term care
  • Fixed interest rates on your Lifetime Mortgage that won’t fluctuate with the market
  • The ability to choose to pay interest-only or interest and some capital back each month to reduce the final loan repayment due when you pass away.

There are so many advantages to equity release for many people that, once they’re made clear, it’s easier for sceptical family members to support your decision.

Weigh Up Possible Disadvantages of Equity Release with Them

Showing your loved ones that you’ve weighed up both the advantages and downsides of equity release will help them to see that you’re not taking this decision lightly.

Talk to them about the potential downsides of equity release – and how you’ve thought about why you’re interested in a Lifetime Mortgage despite them. This could include weighing up options like:

  • Having difficulty moving house in the future (but you still could)
  • Not leaving as much inheritance (instead sharing with them while you’re alive)
  • A Lifetime Mortgage has higher interest rates (but you can choose to pay interest monthly)
  • Taking a tax-free lump sum could affect your other benefits (but you could draw down in installments instead).

As you can see, each downside has a simple counter-argument that highlights the positive move equity release could be for many older people who want to support their family or enjoy their retirement in comfort.

Show Them the Paperwork for Peace of Mind

Sometimes, seeing things in black and white on the page can set a person’s mind to rest. Let your loved ones read the paperwork we’ve sent to you. They’ll be able to see that we’ve offered you a suitable solution that really is in your best interests: we’ll never suggest equity release unless it’s a good fit for you.

Seeing the agreement written down – including the benefits, potential risks, total fees, and how equity release may affect your inheritance or tax circumstances – will help to give your family peace of mind.

Speak to An Equity Release Advisor with Them

Including your family members in your equity release decision will help you to know whether it’s the right option for you. Remember, your loved ones can’t give you qualified financial advice – but they can support you and help you to navigate your decisions by asking questions.

When you talk to us, you can always have a loved one with you on the phone, too. They can ask questions you might forget to ask us – and make sure we’re delivering the top-notch service we promise.

Find out if you’re eligible for equity release by calling 0800 680 0356 today. If we think it could be a good fit for you, we’ll arrange an appointment to speak to an equity release adviser.

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