This month’s guest blog is written by Mel Kenny, a chartered financial planner with Radcliffe & Newlands Wealth, and a SOLLA accredited later life financial adviser, which means he specialises in the financial challenges and decisions that come with growing older.
‘The peonies have been luscious again this year and it looks like it will be another good year for the apple tree, which I planted 40 years ago. Every year I look forward to the spring and summer in my beautiful garden. They say you will have to downsize to release the money. But why on earth would I want to live anywhere else? I love my house, I love my garden, and the memories of a wonderful past are very much present while I am in my own house and garden.’
For some, it is right to move on. For others, your home can be very much a part of who you are. And leaving it can take away a large part of you. Worse still, for someone living with dementia, a change of scenery can be very upsetting.
But it is also not unusual to find that the property you live in has become your only remaining asset, yet things still need to be paid for. Maybe there is now a significant care need. The Local Authority provides Disabled Facilities Grants, but they only go so far. You may need more than a few handrails. In fact, significant renovations may be required.
It is not just a possible care need that may require more money to be freed up. A residential mortgage may need paying off. There might be a need for a new car, or a holiday long overdue.
Perhaps money has simply run out due to the rising cost of living. Maybe divorce left you with the house but little else; or your children or grandchildren need help getting onto the housing ladder; or perhaps you simply don’t want to wait for the knee operation.
And yet you are living in a gold mine.
A lifetime mortgage can provide a valuable last resort to help with these life needs. It is a loan based on your age and the value of your property, where neither the loan nor the interest has to be repaid until you move into a care home or die. In this scenario, interest rolls up, but a No Negative Equity Guarantee protects those who end up needing to borrow a lot.
Lifetime mortgages are not suitable for everyone, and not everyone can get one. There are a number of property criteria to be aware of. Where the property is situated can be a factor. Any asbestos would need to be removed and old fuse boxes updated.
You would need to fully own your property and live there as your main home. If 50% of the property is owned by your children or held in trust following the death of a spouse, that could present a problem. In this respect, it may be worth reviewing your Will to consider who inherits any share of the property if finances are tight with only the surviving spouse alive. Equally, the Will may have been structured that way to limit the financial exposure the surviving spouse might face when it comes to meeting future care fees. This is a nuanced area of financial planning, and it is best approached by taking time to understand your own preferences and what matters most to you.
Whether you are considering staying put and adapting your home, or weighing up your options more broadly, getting the right advice early can make all the difference. The right adviser will take the time to truly understand your situation.
A SOLLA-accredited adviser goes beyond financial know-how. They are trained to understand the wider later life picture. This ranges from how equity release might affect means-tested benefits like pension credit or care funding assessments, to simply lending a patient ear to clients who are navigating a great deal at once. Good advice, after all, is as much about careful listening as it is about the numbers.
If you would like to find a SOLLA-accredited financial adviser who understands later life, you can search for one here: https://societyoflaterlifeadvisers.co.uk/Find-an-adviser
Please note:
A lifetime mortgage is a loan secured on your home. To understand the features and risks, ask for a personalised illustration.
Equity release will reduce the value of your estate and may affect your entitlement to means-tested benefits.
Think carefully before securing other debts against your home.
If you are considering releasing equity, we recommend you discuss this with all relevant family members and seek independent legal advice.
You can contact Mel at www.rad-new.com landline 020 3994 4022, mobile 07952 666625 or email mkenny@radnewwealth.com