Release a cash sum from your property with a home income plan. You can use this to buy an Annuity, giving you a monthly income. All you have to do is pay interest on the loan, either all at once or when you receive your monthly payments.
How much will I get?
How much you get from your home income plan depends on a number of factors such as your age, annuity rates and the value of your property.
As an example, if you release £45,000 from your property with an interest rate of 6.5% and you buy an annuity, then you could receive approximately £300 per month. After you pass away, your house is sold and the loan is home income plan is paid off. The balance in equity is reimbursed to your estate, so you may find you have money left over from your property to leave as an inheritance.
How do I know if a home reversion plan is right for me?
A home reversion plan should never be a decision made lightly. That’s why you should consider a few pros and cons before settling on a home reversion plan:
Pros |
Cons |
| Regular income for life | Annuity rates are fairly low |
| The loans are heavily regulated by the Financial Conduct Authority (FCA) | Your state benefits could be affected |
| Any equity earned from your property after the loan and interest are paid off is available for you to pass down to your family | Early repayment charges |
| You may be able to reduce your Inheritance Tax liability | Usually only available to people aged 75 or over |
| The original loan doesn’t grow | Retirement properties may not be eligible for a home income plan |
| Takes the stress out of paying household bills on time |
The pros and cons list is not exhaustive, but it gives you a good idea of what to expect from a home reversion plan. We highly recommend seeking expert legal advice before you agree to any financial plan. Call us on 0800 614 722 to speak to an advisor.
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