To think about Equity Release

[papayaorange]

My husband and I are mid 60's. We live in a large house we both love but are asset rich and cash poor. I suggested that we release a bit of money from the house which has a lot in it, so that we can buy a new car and have some good holidays. We only have our state pensions and a small company pension. My husband is dead against it as he says it is spending the children's inheritance. What would you do.

Nobody in entitled to an inheritance, live your lives and spend your money!

Do it - I’m always telling my Dad he should do what he wants with his money - spend it on holidays or flash bikes or whichever treat he fancies. He worked hard for it, retired 2 years ago and planned to have a wonderful retirement with my lovely Mum but she died earlier this year. All that time saving for a retirement with Mum that didn’t happen.
Your money, you earned it and you spend it how you want.

Your children's inheritance is currently your life's assets.

What else has he suggested that the two of you have worked for is not your own to dispose of?

A car?
Clothing?
Pictures, jewellery, watches?

What is it about your home that is uniquely not yours to dispose of in a manner that benefits the two of you?

Your legacy is whatever is left when you have lived a life you deem worth living.

If you disagree on what that is you need a long, sit down discussion.

@HoardingSamphireSaurus

Your children's inheritance is currently your life's assets.

What else has he suggested that the two of you have worked for is not your own to dispose of?

A car?
Clothing?
Pictures, jewellery, watches?

What is it about your home that is uniquely not yours to dispose of in a manner that benefits the two of you?

Your legacy is whatever is left when you have lived a life you deem worth living.

If you disagree on what that is you need a long, sit down discussion.

Yes I agree. We have both worked long and hard for nearly 50 years and honestly have never been given a penny that we didn't earn. Never had anything left to us or given to us. Our children have their own homes and jobs and nice cars so they are not in need of anything really. I will work on him.

You are very young to be considering this.

Take independent professional advice before doing this

@Elphame

You are very young to be considering this.

Take independent professional advice before doing this

Hi, I did not consider that we were too young for this. Are most people older who take this out?

Equity release often a scam would be much better to downsize. Will likely be in a similar position in 10 years time I know DH won’t want to sell up but you need to live and enjoy life while you are still mobile. Leaving money to your children I just wouldn’t consider important.

You are mad to consider equity release. The companies that run these schemes don't do it out of the goodness of their own hearts! They will always do better out of this arrangement. Please do your research properly www.moneysavingexpert.com/mortgages/equity-release/ and www.theadvisory.co.uk/sell-house-fast/equity-release-schemes-pros-cons/ and seek the advice of an independent financial advisor.
I would chose downsizing a million times over than equity release!

He wants to leave an inheritance more than you that’s the crux of it.
What sort of position are your dc in?

Unless someone has a child who has a disability that means their potential was always going to be curtailed then I think going without to leave an inheritance is a bit daft. However equity release schemes are generally not good value. I’m assuming you are very emotionally attached to your home?

MIL is selling her home next year to release capital. Though if she could budget she wouldn’t need to. DH was going through her statements yesterday at her request. She is £200 short per month roughly but could save almost all of it but she won’t give up her private dentist, all organic food and many other things. At least he spotted her overpaying for things she doesn’t use on her internet and telephone provider, paying almost £30 more than she needs per month. It has made us really scrutinise our retirement plans, we have good pensions but our income will still halve.

What happens if one of you needs paid care? How does equity release work then?

Isnt equity release a bit of scam game? Basically you get a small amount of money and they get whole house? If def seek financial advice.
What happens of money runs out and then you have no asset to sell as they won your home though equity release? Also think you cant sell or downsize without huge penalties

You would be far better to downsize and spend the newly released cash.

Far to many people leave it too late to downsize and end up watching their house deteriorate around them as they can no longer maintain it.

Cross post, see your dc are doing well, seriously consider downsizing over equity release. If it’s a large house it will always have the running costs. My Mother sold her four bed house for a one bed bungalow, her sister remained in her absolutely enormous six bed house. She scolded herself boiling a kettle to wash as she couldn’t afford to heat water. They both lived till in their nineties. My Aunts house was really very beautiful, it had a triple width staircase, it was an exceptionally grand house. But her retirement was miserable. My Mother had her cosy bungalow with a small garden and conservatory and though disabled and bed ridden towards the end ate expensive ice cream, cake whatever the hell she pleased and had multiple streaming services so she could watch lots of tv.

Equity release is mostly used by homeowners with dire financial circumstances and very little options. Please don't even entertain the idea. If you want to release some equity then downsize instead.

I agree with PP's - get professional advice before considering equity release.

Is it possible to downsize? It doesn't sound like you are going to have very generous pensions so may find general running costs on a smaller property more within your monthly budget (aside from any capital expenditure). Is your DH proposing that you live like paupers in your old age - only having the heating on in one room just so you can leave an inheritance to your DCs?

No one should be expecting an inheritance. If your DC are then you need to re-educate them right now.

Ageee with dh, you'd be crazy to equity release. Downsize but dint end up in a home that isn't yours.

Yes I will look carefully at all options. We are not in dire straits, our home is warm and we have all we need but just not extra money for holidays or a new car. My children do not expect anything so do not need re educating!

The companies that run these schemes don't do it out of the goodness of their own hearts! But you could say that about any financial product - house insurance, life insurance, critical illness etc. That doesn't mean you shouldn't purchase any of these.

It may be a suitable product for you OP, but it's worth seeking independent financial advice.

I would down size before doing equity release.

I think it all stems from the fact that my husband and I had nothing, were given nothing and expected nothing. He does not want the same for the children. But as I said thankyou for the advice and we will look very carefully at our options.

My DP did this and it did seem to be quite sensible in their case ( much older than you). However when DF died my DM’s income dropped dramatically-and it was very modest anyway. Theoretically she should be entitled to quite a bit of government support but because she has the equity from the house her savings are too high.

She doesn’t want to spend that money on bills etc, like you she envisioned buying nice holidays and possibly a newer car.

Worth considering. I’d downsize and reduce your outgoings plus have the equity.

Our children have their own homes and jobs and nice cars so they are not in need of anything really. I will work on him.

If this is the case then you are mad to worry about inheritance! I've never heard anything good about equity release and agree with others that you should downsize to release the funds you need to enjoy life while you are both young enough to do so.

None of our young adult dcs yet own a home and living in the south east it worries me how they will ever be able to afford to. We will probably downsize in a few years to help them if necessary. But if they don't need our help - as yours don't - then we won't!

@MatildaTheCat

My DP did this and it did seem to be quite sensible in their case ( much older than you). However when DF died my DM’s income dropped dramatically-and it was very modest anyway. Theoretically she should be entitled to quite a bit of government support but because she has the equity from the house her savings are too high.

She doesn’t want to spend that money on bills etc, like you she envisioned buying nice holidays and possibly a newer car.

Worth considering. I’d downsize and reduce your outgoings plus have the equity.

thank you.

it is a terrible way to borrow money
the interest rates end up being exorbitant if you live a long time

Thanks everyone. Just received some bad news of 2 deaths in the family! Thank you but bye.