Dorset Council and Citizens Advice are asking people to think carefully before committing to equity release schemes. Equity release is a term for a range of schemes whereby funds are released from a property.
Reasons for taking out equity release vary, but with the increase in the cost of living people are looking to supplement their income, especially those on a fixed pension. These schemes often give people considerably less than the market value of their home and can require some upfront costs, including arrangement fees, legal fees and a survey of the property.
Before taking out any new loan or signing onto any equity release scheme, residents are encouraged to shop around and seek independent financial advice. Many providers do offer some reassurances such as a no negative equity guarantee, meaning the money to be paid back will never be more than the total value of the property, however this still means the market value may be taken up by interest or other costs.
Cllr. Laura Beddow, Dorset Council Cabinet Member for Culture, Communities and Customer Services said:
“It is important that residents shop around and look at all the options before signing onto any scheme. We encourage residents to seek advice with organisations such as Citizens Advice to see if there are other benefits or assistance available. These organisations can signpost residents onto Independent Financial Advice before making any decision”
For those considering equity release schemes you may wish to consider other benefits and options or check that you’re receiving all the benefits you’re entitled to. For more information, visit our website www.dorsetcouncil.gov.uk/w/cost-of-living-help or seek independent advice from Citizens Advice.
Citizens Advice run income maximisation sessions in Dorset Libraries. These free sessions are run by specialist advisers who can advise on money-related topics including budgeting and debt. They can also check benefits and charitable grants entitlement. For more information and to book onto one of the sessions as well as confidential advice and support, call the Dorset Adviceline on 0800 144 8848 or visit www.citizensadvicedorset.org.uk. Alternatively, for guidance about financial advice, visit www.citizensadvice.org.uk/debt-and-money/getting-financial-advice/
Thank you for your advice about equity release, I feel sure that your advice will help a lot of people. May I suggest that you should ask all the councils in england and Ireland to publish your advicez
Wise of Dorset Council to offer this advice – to think hard before you take out equity release on your property – what they do not say is that if you do, for ANY reason – you will not receive any financial help from the Council towards homecare or residential care, if and when you need it, even if your income is below the threshold. In such case you will have to liquidate all your assets (sell your home for whatever you can get) to pay for care, as you will be seen as having “deliberately disposed of your assets ” , even though you had taken out the equity release years before. Your money is not your own to do what you like with.
Hi Jennifer,
You are wrong regrading the points you have made. Deliberate deprivation of assets is the issue you refer to. That is if you knowingly take funds from your property to avoid care costs.
If you take assets from your home, spend these on a holiday, buy a new car and gift to the children, this is fine.
Five years later you need care, you will be entitled to financial assistance if you qualify. As long as you had been unaware that you were going to need assistance