Will equity release impact on my loved ones’ inheritance?

Published: 27/09/2013

For the majority of retirees, their home is their biggest asset and will therefore account for the lion’s share of their loved ones’ inheritance. As a result many retirees are a little concerned about taking out an equity release plan for fear it will diminish the inheritance pot.

An equity release plan allows a homeowner to release an amount of equity from your property whilst retaining the right to live there. The loan is then repaid when the property is sold typically when you have passed away or if you have moved into long term residential care.

Whilst equity release can have an impact the level of inheritance, a study by Aviva revealed an overwhelming majority of beneficiaries would be happy to forgo their inheritance to ensure their parents and grandparents had a more comfortable retirement; 76 per cent were ‘happy for their parents and grandparents to use equity release to help fund their retirement’.

Richard Espley, Head of Equity Release at Goldsmith Williams, comments:

“This survey is so important because it addresses one of the great British taboos – the topic of inheritance. There are undoubtedly many retirees in financial difficulty who are aware of equity release but are reluctant to take out a plan. In essence they are putting their loved ones’ interests ahead of their own.

“But this survey highlights that pensioners need not suffer in silence with over three-quarters of Britons happy for their parents to use the cash in their property to enjoy a better lifestyle in retirement.

“This just goes to show how important it is to talk openly with your family. Whilst we appreciate it is not an easy conversation to have, it is always a good idea to involve those affected in your decision making process.”

Content correct at time of publication