Pension Advice Dorset
What is Equity Release
It is a way of taking some of the value of your property as cash to help you do the things you would like to do without selling your house and moving home.
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Pension Advice Dorset
Equity Release
More and more people are turning to equity release as a means of providing additional income in retirement or simply using some of their accumulated wealth in the value of their home to fund home improvements, pass over inheritance money to the family before dying, clear other mortgages or debts or just spend the money on something they have always wanted.
Pension Advice Dorset
Equity Release
When using equity release as a means of generating a cash lump sum you are borrowing money against the security of your home. This money is paid to you ‘Tax Free’ and represents a debt which is normally repaid upon death or beforehand if the house is sold or you move into long term care.
Pension Advice Dorset
Equity Release
The debt is a loan and will attract interest which can either be paid to the lender from your income meaning the debt stays the same or ‘rolled up’ meaning the debt will increase as the years go by. All equity release mortgages offered in the UK provide a guarantee that the debt will never exceed the value of your home this is known as a ‘no negative equity guarantee’.
Pension Advice Dorset
Equity Release
Equity Release Mortgages do require specialist advice and we act as introducers to a fully licenced company who provide this formal advice and make sure you fully understand all that you need to know before withdrawing equity from your home.
If you would like a free consultation, we will arrange the necessary introduction and they will explain your options and exactly what is involved.
important things you should know
FREQUENTLY ASKED QUESTIONS
Most pension investments allow up to 25% to be taken as a Tax Free Lump Sum. Anything drawn over this amount will be subject to income tax at your highest marginal rate. Tax will usually be paid under an emergency tax code with any overpaid tax repaid in the following tax year or earlier if you put a claim into HMRC.
Click here to calculate the amount that will initially be deducted.
Also known as a ‘Money Purchase’ pension this is a pension where the benefits are not defined and the value of the pension investment will depend entirely on how much money has been paid in and what return on the investment has been achieved.
Often referred to as a ‘Final Salary’ pension which is where the benefits that the pension will provide at retirement are defined and not dependent on how much money has been paid in. These types of pensions do not have a published investment value though it is usually possible to obtain what is known as a Cash Equivalent Transfer Value (CETV) where the scheme administrators will calculate how much they are prepared to let you have if you forgo the defined benefits built up whilst you were a scheme member.
Tax will most likely have been deducted under PAYE rules using an emergency tax code. You can either wait until HMRC reconcile your tax affairs in the next tax year or claim for early repayment of any overpaid tax by using form P53 or P53Z. These forms are available from www.gov.uk.
You cannot normally access the money in your pension before age 55.
Our business model involves us asking you a series of questions designed to enable us to gather sufficient information and understanding of your requirements that we can present you with information on all of the options available to you. We aim to do this in such a way that you are fully empowered and confident enough to make an informed decision as to the best outcome for your personal circumstances. If at any time during the process it becomes evident that you require and/or need formal recommendations for a particular course of action and we will refer you to an independent financial adviser.
Enhanced Annuities
Enhanced annuities work in the same way as a standard pension annuity but also consider your lifestyle and health conditions. If you qualify for an enhanced annuity you would expect it to provide more income for the rest of your life than a standard pension annuity would provide.
Lifetime Annuities
A lifetime pension annuity is designed to provide you with an income and is payable for the rest of your life as a minimum. The funds that you have saved into your pension pot are used to purchase an annuity either from your existing pension company or from a new pension income provider.
Fixed Term Annuities
A Fixed Term Annuity is a type of Guaranteed Drawdown product designed to allow you to access your pension in a more flexible manner than purchasing a set income for the remainder of your life which is what a lifetime pension annuity does. They provide a guaranteed return on your investment.
Flexi Access Drawdown
Flexible Access Drawdown products provide a flexible way to take your pension and range from relatively low risk products with guaranteed returns to high-risk products investing in all manner of asset classes. Whilst providing flexibility they do not give a guaranteed income for the whole of life.
Releasing Tax Free Cash
When you are 55 or over you can access your pension and, if you wish, take a tax-free lump sum. You can then invest the remainder in a pension product and either take an income or keep it invested. You can normally take up to 25% of your investment tax free and use this money as you wish.
Tax Free Lump Sum
If your pension has not been crystalised (accessed previously) you can take a tax-free lump sum from the pension investment. This is normally in the form of a 25% tax free lump sum payment, but some types of pension schemes do have enhanced benefits and permit more than 25% to be taken.
State Pensions
The Basic State Pension is available to men born before 6th April 1951 and women born before 6th April 1953 and the New State Pension available to those born later. We have links to the Government information pages and the State Pension Age Calculator and a link to obtain your State Pension Forecast.
Equity Release
Is a way of taking some of the equity (investment wealth) built up in your property as tax-free cash to provide additional income in retirement or to pass over inheritance money to the family before dying, repay other mortgages or borrowing or to just spend on something you have always wanted.
Pension Advice Dorset
What areas do we cover?
With our office in Ilminster we can provide face to face meetings for people in Taunton and Yeovil. We are may also be able to arrange face to face meetings in the areas of Barnstaple, Bridgwater, Glastonbury, Shepton Mallet and Wells areas.
We also provide our reliable pensions services to clients in Dorset, Somerset, Gloucester, Wiltshire, Bristol, Cornwall, Dorset and Somerset.
We are happy to have video meetings with people and therefore can provide a visual meeting to anyone in the UK. We are happy to talk through your options over the phone regardless of your location, so we can discuss your needs. We also are very happy to communicate with you through email which many customers now prefer, we can therefore provide a full UK coverage.