Your retirement - not necessarily gold plated

Steve Wilkie, Managing Director of equity release specialist Responsible Equity Release, explains to readers how you can fund a more comfortable retirement, while still leaving a legacy for future generations.

It's a case of reality not quite living up to popular perception. While many people assume that police can all look forward to a gold-plated pension and early retirement, this is simply not the case.

The reality is for many police officers approaching retirement, their pension finances may fall short. If this applies to you, you'll need to think hard about how you'll live in retirement - and the legacy you want to leave to your children.
For most, your legacy is often centres on the home. Over the years equity has been built up in property that, in turn, has (more often than not) seen an increase in value, and subsequently a good return on investment that serves as an ample family inheritance, and indeed a way to help fund your retirement.

Your legacy

With people living longer, inheritance doesn't usually come through until people are well into their 40s and 50s, when for many people, their 20s and 30s are the decades where spare cash can have the biggest impact.
University fees, a first home, getting married - these are just some of the financial strains in people's lives where parents and grandparents would like to support their family, but have all their money tied up in their home.
As a result, people are increasingly looking to equity release to produce the necessary cash flow.

The difficulty is that the perception of equity release has been difficult to shake off. Happily though, the problems associated with unregulated equity release products sold during the 80s and 90s are now becoming a distant memory. Equity release has undergone a major change, making consumer protection a number one priority to allay fears previously associated, and now all plans carry the right to remain in your property for life. Indeed, equity release can now be considered a solution to many of the problems that are being faced by our ageing population.

Family First

Some products are designed with the family in mind, with some offering the ability to ring-fence a portion of the property from any effect of borrowing against it. While equity release will reduce the overall value of the estate, an inheritance can be guaranteed to the estate and can be set at specific amounts such as 50%.

Lifetime Mortgage

While the more popular equity release plan is called a lifetime mortgage, don't be fooled by its title. Advancements in these plans recognise that people are living longer and don't want to be tied to a mortgage, meaning there is now flexibility built in to this product.

Interest Only

This option is becoming increasingly appealing to older family members who want to help out their children and grandchildren. Taking out an equity release plan should involve the whole family, and often, as part of the family decision, the children or grandchildren want to make a contribution by paying the interest payments to avoid eroding the equity in the property.

So if you are looking for a way to provide an early inheritance at a time when it is arguably needed most, while looking to aid a more comfortable retirement, then consider equity release. The equity release industry has grown up, shaken off its bad reputation and innovated to address a growing need from an ageing population.