Equity release schemes !
Re: Equity release schemes !
As a retired IFA I used to get enquiries for these schemes. In most cases I discouraged them, but still ended up arranging two or three a year because they can be the answer in some situations. Now well retired and a widower I initially downsized, but two years ago took out an interest roll up mortgage scheme myself. It suits me in my circumstances enabling me to live in comfort and ride my bike
Power to the pedals
Re: Equity release schemes !
hondated wrote:Anyone aware of a ERS that is safe and you don't end up renting your own house back from the new owners within a very short time of taking it out.
Martin Lewis the money expert has stated that until he is aware of a safe scheme he will not offer advice on any of them.
Do you know better !
It would just be a shame to pop my clogs without enjoying the fruits of our labours over many years in buying the house. Still if we do the kids will be having a great time.
I think you've answered your own question - there are no worthwhile schemes.
I haunt a motorhome forum and quite a few people there rent out their bricks and mortar homes, buy a motorhome and go off travelling full time. There are things you need to sort out, for example you need a UK address for insurance etc but a relative could provide this.
The arguments for renting rather than selling include: you don't know how long you are going to live so the money you make from selling the house may run out before you do, so to speak*, and secondly, you might change your mind about your lifestyle and want to return!
*Same applies to ERS.
-
thirdcrank
- Posts: 36740
- Joined: 9 Jan 2007, 2:44pm
Re: Equity release schemes !
There are at least three unknowns.
First, you don't know how long you will survive. Then, you don't know whether you will have a long period of incapacity through dementia etc. Apart from that, tax avoidance wheezes only work if you give the property away unconditionally which takes us to third: nobody can know how their loving family will react to having the dosh in the bank or more likely all spent and being expected to look after elderly parents in return for having had "their" rightful inheritance in advance.
I'm not the first to note that the only two certainties are death and taxes. The govt., seems pretty cute when it comes to collecting the taxes, especially from ordinary people. So, for example, give everything away to avoid paying for care in later life and they can treat it as still belonging to you. It's called "divestment" and it's a bad thing. Advice from tricky-dicky accountants is a sign of planning.
==========================================================================================
PS I'm not saying there's no scope for sensible financial planning and housekeeping. Making a proper will, is an example and it's worth considering a lasting power of attorney. All I'm saying is that most of the wheezes thought up by rich people's advisors are soon denied to the hoi-polloi. As my dear old dad used to say, "What would happen if everybody did that?" Apart from the govt being quick to plug gaps, there are legions of middlemen out there who need to be kept in the manner (often the manor
) to which the have become accustomed. The management charges can turn many financial schemes into very poor value for money.
First, you don't know how long you will survive. Then, you don't know whether you will have a long period of incapacity through dementia etc. Apart from that, tax avoidance wheezes only work if you give the property away unconditionally which takes us to third: nobody can know how their loving family will react to having the dosh in the bank or more likely all spent and being expected to look after elderly parents in return for having had "their" rightful inheritance in advance.
I'm not the first to note that the only two certainties are death and taxes. The govt., seems pretty cute when it comes to collecting the taxes, especially from ordinary people. So, for example, give everything away to avoid paying for care in later life and they can treat it as still belonging to you. It's called "divestment" and it's a bad thing. Advice from tricky-dicky accountants is a sign of planning.
==========================================================================================
PS I'm not saying there's no scope for sensible financial planning and housekeeping. Making a proper will, is an example and it's worth considering a lasting power of attorney. All I'm saying is that most of the wheezes thought up by rich people's advisors are soon denied to the hoi-polloi. As my dear old dad used to say, "What would happen if everybody did that?" Apart from the govt being quick to plug gaps, there are legions of middlemen out there who need to be kept in the manner (often the manor
) to which the have become accustomed. The management charges can turn many financial schemes into very poor value for money.
Re: Equity release schemes !
Thanks everyone for your responses to my question. I am sure that in time I will use a lot of the advice offered but for now its enough to be able to get out on my bike.