Making the most of your retirement A guide to equity release and the advice service

Contents Welcome

3

Do more with your retirement

4

What is equity release?

5

Is equity release right for you?

6

Different types of equity release

8

How UK property prices have changed

10

Imagine what you could do

11

Helpful, expert advice

12

How equity release has helped others

13

Frequently asked questions

14

Next steps

15

2 | A guide to equity release and the advice service

Welcome The Age UK Equity Release Advice Service is provided by Just Retirement Solutions Limited, one of the UK’s specialist equity release advisers and part of the JRP Group plc. This service will look at whether equity release is right for you and includes a free state benefits check, to make sure you’re not missing out on anything you’re entitled to. What’s more, among other products, you’ll also have access to two lifetime mortgages that are exclusive to Age UK customers, provided by Just Retirement Money Limited, a provider of equity release plans in the UK and part of the JRP Group. These products include special features such as a free valuation and the ability to borrow smaller funds should you wish to release further cash from your property at a later date. Just Retirement Solutions helps people every day to improve their income in retirement, so we’re confident you’ll be in good hands. This guide, which has been put together by Just Retirement Solutions, will help you in taking your first steps to finding out more about what equity release has to offer.

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Do more with your retirement Retirement means different things to different people. For some it’s a chance to relax and spend more time with family and friends. Others see it as a chance to take a holiday of a lifetime or pursue a hobby. Of course, when you stop earning you still have to pay your way which could mean you’re facing the challenge of trying to make your income stretch to cover your living expenses. This guide provides you with the essential information you’ll need to decide for yourself if equity release could be for you. If you have any questions, no matter how small, you can call Just Retirement Solutions’ specialist team on 0800 023 2837*.

Your retirement should be the time when you have the freedom to do all the things you previously never had time for, without having to scrimp and scrape to find the money. Equity release could be the solution and help supplement your savings, so you can enjoy your retirement to the full. Equity release enables you to unlock some of the equity in your home whilst you still live there, turning it into tax-free cash.

Equity release is not right for everyone, and will reduce the value of your estate. We understand that deciding if it’s right for you is a big decision. Your home is likely to be your biggest asset so you will want to make sure you have received the best possible advice. That’s why Just Retirement Solutions, one of the UK’s specialist equity release advisers, have been selected to provide the Age UK Equity Release Advice Service.

* Calls may be monitored and recorded for training purposes.

4 | A guide to equity release and the advice service

What is equity release? Equity release is the process of unlocking some of the value or equity from your home whilst you still live there, turning it into tax-free cash. Equity is the value of your home, minus any outstanding mortgage or loan secured on it. Customers often use the money raised through equity release to make home improvements, provide gifts to family, ease money worries, take a holiday of a lifetime or to improve their retirement funds. There are lots of other uses too. If you are thinking of using equity release to manage existing debt, then your Just Retirement Solutions adviser will explain how doing so could increase the total cost in the long-term – and if there’s a better option they’ll let you know. With equity release you: • could access a tax-free cash lump sum that you can use for almost anything you like. • can continue to live in the home you love for the rest of your life. • have the option to guarantee an inheritance for loved ones. • have the reassurance that any equity release products recommended to you by Just Retirement Solutions come with no risk of negative equity – so neither you nor your loved ones will ever owe more than the value of your home (subject to the terms of the plan being met).

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Is equity release right for you? It’s important to bear in mind that equity release is a lifelong commitment and there are questions you should ask yourself to help decide whether equity release is right for you. Points to consider are: • will your current level of income keep up with inflation? • will the savings or investments you have meet future requirements such as long-term care? • what would happen financially if you or your spouse became ill or died? • could you leave behind cash for your family, and if so how much? A professional service with no pressure to buy Your decision to take out an equity release plan should not be taken lightly. After all, it will reduce the value of your estate and might affect your entitlement to means-tested state benefits. This is why your adviser will fully review your finances and state benefit entitlement, helping to ensure you are claiming everything you are entitled to and you understand any impact equity release may have. Your adviser will help you decide if it’s right for you. If it’s not a good idea for you, your adviser will clearly state the reasons why and aim to identify other options for you. If it’s right for you, they’ll provide you with a personalised illustration and recommend a product. If you go on to buy the product they recommend to you, there will be a fee of £675 for the advice and arrangement of the plan for you. It’s a family affair Just Retirement Solutions has helped thousands of people get to grips with equity release, and understands that family is very important. So they always encourage you to involve your family in the decision-making process. After all, releasing some of the equity from your home is a serious decision and will affect the amount that you leave behind when you pass away.

6 | A guide to equity release and the advice service

Are you eligible for equity release? • Do you own and occupy a UK property of standard construction? • Are you aged 55† or over (youngest applicant, if a couple)? • Is your property worth at least £70,000†? If you answered yes to these questions and want to know if equity release can help you, call Just Retirement Solutions on 0800 023 2837* today. Minimum age and property value varies between product providers *Calls may be monitored and recorded for training purposes. Lines are open from 9am to 5pm, Monday to Friday (excluding bank holidays). †

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Different types of equity release Lifetime mortgage A lifetime mortgage is a type of loan secured against your home. It allows you to release a cash lump sum from the value of your property. Some lifetime mortgages even allow you to take smaller amounts of money as and when you need it. You continue to own and live in the home you love and will benefit from any increase in its value. In addition, lifetime mortgages recommended by the Age UK Equity Release Advice Service come with a ‘no negative equity’ guarantee; so, neither you or your loved ones will owe more than the value of your home once it is sold. With most lifetime mortgages, there are no regular payments to make and nothing usually has to be paid back until the last borrower living in the property dies or moves into permanent long-term care.

Advantages

Considerations

You receive a tax-free lump sum.

It will reduce the value of your estate.

You can live in the home you love for the rest of your life.

Early repayment charges may apply if you repay early. Your adviser will explain this in detail.

You continue to have full ownership of your home and benefit from any increases in its value.

If the value of your home falls, your remaining equity will also reduce, potentially impacting future drawdown amounts.

‘No negative equity’ guarantee with lifetime mortgages recommended by Just Retirement Solutions.

Your entitlement to state benefits may be affected.

No need to make regular payments.

The amount you owe will continue to grow as interest accumulates and is added to the loan over the long-term.

8 | A guide to equity release and the advice service

There are two main types of equity release: lifetime mortgages and home reversion plans.

Home reversion plan Home reversion plans involve selling part, or all, of your property to a home reversion provider in return for a cash lump sum. Whilst all or part of your home will belong to someone else, you can remain living there for the rest of your life, rent-free. A home reversion plan is not a loan so there’s no interest to pay. However, if your home increases in value, you will only benefit from the increase in value of the proportion you retain. When you die or move into long-term care, the property will be sold and the home reversion company receives its share of the proceeds. You should be aware that when you take out a plan you will receive less than the current market value of your home. This is because the reversion company who buys your home cannot sell it until you, or both of you if borrowing jointly, have died or moved into permanent longterm care, and they need to protect themselves against any potential loss in value (if the housing market falls). Advantages

Considerations

You receive a tax-free lump sum.

It will reduce the value of your estate.

You can guarantee an inheritance for your estate – if you only sell part of your property.

The home reversion company owns a share, or all, of your home.

It’s not a loan so there’s no interest to pay.

Home reversion plans can be repaid, but would have to be bought back from the reversion company at the full market value.

You can live in your home for the rest of your lifetime.

Your entitlement to state benefits may be affected.

You can usually release higher amounts than through a lifetime mortgage.

You will receive less than the current market value of your home.

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How UK property prices have changed House prices in the UK have increased significantly over the last few decades and these rises could mean that there is considerable equity tied up in your home. Do you remember the very first home you purchased – possibly more than 40 years ago – and how much it cost you? You may enjoy sharing this information with younger generations, especially when you consider in today’s terms, the cost of your first home may have been lower than the cost of a new car today (the average property price in 1975 was under £11,000). Even when you consider the changes over just the last 20 years, property prices are significantly higher than what they were in 1995. So you might be pleasantly surprised by how much equity you have in your home and how it could be the key to help you achieve a better retirement. Average UK house prices £193,900

£200,000 £156,325

£150,000

£100,000

£50,000

£0

£165,483

£80,366 £51,245

1995

2000

2005

2010

2015

Source: Nationwide House Price Index, December 2015. Prices used are all houses in UK, seasonally adjusted.

10 | A guide to equity release and the advice service

Imagine what you could do There are many reasons why you may consider equity release and you can use the funds generated for almost anything you choose. Everybody’s circumstances are different, but we’ve found our customers most commonly use their funds to: Make home improvements From a new kitchen or bathroom to a new boiler or better insulation, the funds you release could help you update your home and make it as comfortable as possible. Managing existing debt Managing outstanding debts such as credit cards, loans or an existing mortgage could help to reduce your monthly outgoings and make it easier for you to fund your day-to-day expenses. Using equity release to repay an existing mortgage or current debt could increase the total cost in the long term. Give family financial help or gifts You may want to see your family enjoy part of their inheritance by helping them out financially with setting up their own home, family holidays or perhaps a family wedding. Take a holiday of a lifetime We all love a good holiday, and without the constraints of working life your horizons from now on will be limited purely by your imagination. Buy a new car What you need from a car changes throughout your life and in retirement you may want to update your car to make it more suitable for your needs.

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Helpful, expert advice With a decision as big as equity release, trust is always a big factor. That’s one of the reasons why Just Retirement Solutions have been chosen to provide the Age UK Equity Release Advice Service. Just Retirement Solutions have provided advice to thousands of people who have used the equity built up in their home to provide for a better retirement. They always treat customers fairly and honestly. In fact, they actively encourage customers to speak to their families and discuss all their options. All about personalised service Everyone is different, from current needs to future aspirations. This is why Just Retirement Solutions’ experienced advisers will always take the time to sit and discuss exactly what your requirements are. You can choose to do this either by phone or in person. To come up with a plan that suits you, your adviser will fully review your finances and state benefits entitlement, helping to ensure you are claiming everything you are entitled to. They will also explain to you how equity release will reduce the value of your estate and if it affects your entitlement to means-tested state benefits. A no-obligation advice service The service carries no-obligation and if, for any reason equity release isn’t for you, your adviser will tell you – clearly stating the reasons why and will aim to identify other options. If you do not proceed there is no charge for providing you with advice. If you decide to take out a plan, there will be a fee of £675 for advice and arranging the equity release plan Just Retirement Solutions recommends.

12 | A guide to equity release and the advice service

How equity release has helped others Here are just a few examples of how others have used equity release to achieve their goals and enjoy retirement to the full.

“

We will certainly be able to have more expensive holidays. We’ve just arranged a one month cruise.

“



The service was brilliant, very good. The chap that came to see us was very helpful.



I would certainly recommend Just Retirement Solutions to someone else.



Mrs Harbord, Kent

”

I took out an equity release plan to help my children. Without equity release I wouldn’t have been able to help my family.



Mrs M Edwards, Nottingham

”

“

Taking out an equity release plan took a great big cloud off my head thats been there since my husband passed away. I don’t want to move house, so for me, equity release was my only solution.



Mrs J, Devon

”

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Frequently asked questions Will I still own my home? If you take out a lifetime mortgage, then yes. But with a home reversion plan the provider you go through will own all or part of the property. With both products you will still be able to live in your home for the rest of your life. Please note a lifetime mortgage will be secured against your home. What can equity release be used for? A number of things, such as going on a holiday of a lifetime or making gifts to family. If you have an existing mortgage on your home, you would have to use the money you release to pay off your existing mortgage first, but then you would be free to spend the remaining as you wish. Keep in mind that repaying your existing mortgage with an equity release product means you will be taking on another form of debt (with a lifetime mortgage), or selling a portion of your home (with a home reversion plan), and this could increase the total cost in the long-term. Will I be able to move house? Generally yes, many plans can be transferred to a new home, provided your new property can act as acceptable security. With a lifetime mortgage, if you are moving to a property of lesser value you may have to repay some of the outstanding loan. What happens if my partner or I need permanent long-term care? Long-term care should not affect the terms of your plan. Where the plan is in joint names and one of you leaves to go into permanent long-term care the other can continue to live in your home. Remember though that the plan will normally end if you both go into permanent long-term care. How much will it cost? If you decide to take out an equity release product that Just Retirement Solutions recommends, there will be a fee of £675 for advice and arranging the plan. You will only be charged if you decide to take out a plan. Their advice carries no obligation. Additional fees such as valuation, arrangement and solicitors fees will be payable and in some cases, can be added to the amount of funds you choose to release. 14 | A guide to equity release and the advice service

Next steps As equity release is such a big decision, it is essential to take professional financial advice before moving ahead with an equity release plan. This is where speaking to an adviser through the Age UK Equity Release Advice Service can help. What are the next steps? Get in touch Call 0800 023 2837* and one of Just Retirement Solutions’ specialist team will discuss your circumstances, review your eligibility, and, if appropriate, arrange an appointment for you to talk to an adviser either over the phone or in your home. Your first appointment Your adviser will discuss your goals and requirements, helping you to consider all the options, look at alternatives and answer your questions. They will help you see whether equity release is right for you. Your second appointment Your adviser will look at all the benefits, if any, you are currently claiming to make sure you’re not missing out on any that you may be entitled to. Then they will present recommendations to you and advise you on whether taking out equity release will adversely affect your tax status or state benefit entitlement. At this stage, if you feel comfortable and want to proceed, they will help you to complete your application. This will be sent to your chosen provider who will arrange a valuation to be made on your property. Your adviser will also confirm any fees that may be payable and when these will be due. Receive your tax-free cash Your provider will issue your offer directly to you, and once the legal paperwork is complete, your funds will be released. After you receive your monies (takes seven weeks on average), Just Retirement Solutions will follow up with you to make sure that everything is okay. * Calls may be monitored and recorded for training purposes.

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Information and advice to help you to make the most of your retirement. To arrange an appointment or find out more contact the Age UK Equity Release Advice Service today on

0800 023 2837*

or email [email protected] Lines are open between 9am to 5pm, Monday to Friday (excluding bank holidays). www.ageuk.org.uk/equityrelease

*If you call the 08 number, you will be dealing with Just Retirement Solutions, which provides the Age UK Equity Release Advice Service. The call centre opening hours are 9am to 5pm, Monday to Friday. Calls may be monitored and recorded for training purposes. The Age UK Equity Release Advice Service is provided by Just Retirement Solutions Limited, and brought to you by Age UK Enterprises Limited. The products that are exclusive to Age UK customers are provided by Just Retirement Money Limited. Both are registered to the office address, Vale House, Roebuck Close, Bancroft Road, Reigate, Surrey RH2 7RU. Just Retirement Solutions Limited is registered in England no. 05125701. Just Retirement Money Limited is registered in England no. 09415215. Just Retirement Solutions Limited and Just Retirement Money Limited are authorised and regulated by the Financial Conduct Authority. Age UK Enterprises Limited is a commercial arm of Age UK (charity no. 1128267) which donates its net profits to the charity. Age UK Enterprises Limited is registered in England and Wales no. 03156159. Registered office: Tavis House, 1- 6 Tavistock Square, London WC1H 9NA. Age UK Enterprises Limited receive commission from Just Retirement Solutions Limited of up to 0.75% of the amount advanced under each equity release plan sold together with a contribution towards marketing support. Net profits raised by Age UK Enterprises Limited from commission are donated to Age UK the Charity. 12935.6

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