If you are looking for ways to provide additional income or create extra liquid capital as you reach retirement and beyond, it’s important to carefully consider all options before you make any big decisions.
Equity Release might be an option for some, but it won’t be right for everybody. There are other alternatives which you should also consider, including different ways you could make use of the value of your property. In all cases, it’s important to think about what you want the money for, how much you might need and over what timescale it might be needed.
Some alternatives to Equity Release include:
Downsizing your home
The most obvious way to turn your home, or at least a portion of it, into liquid capital is perhaps downsizing. However, downsizing has its costs, including estate agency fees, legal fees and Stamp Duty. Additionally, you may have an emotional attachment to your current home.
Taking in a lodger
If your home has a spare room or an area which could be converted into a flat, this could be a good way to generate income, which is often tax-free. Understandably though, many people are put off by the thought of sharing their home with someone they don’t know.
Credit cards or unsecured loans
Taking out a loan or using a credit card could be a reasonable option if you need money in the short term, perhaps to pay for a special event or one-off purchase. But over the longer term, paying the interest rates and the initial amount borrowed can be more expensive than Equity Release rates.
Help from family
The interest charged may be lower, or even non-existent, but like any other form of borrowing, loans from family need to be paid back eventually. There’s also the entirely understandable fear that financial arrangements made between family members can easily compromise the relationship.
Reduce your outgoings
This option sounds like an obvious one and, in many ways, it is. However, cutting down on spending is sometimes easier said than done. Keeping a clear record of regular and one-off expenditures is a good way to identify areas where savings might be made and is always worth considering.
Delaying retirement or working part-time
One solution to worrying about lack of money after stopping work is not to stop work! The option to keep working won’t be available or indeed be appealing to everyone, but it’s one more possible alternative to explore.
Do your homework
There are times when Equity Release is the right option. We’ll ensure you understand the advantages and disadvantages of each option, helping you to make an informed decision about what’s right for you and your family.