Nowadays, reaching the age of retirement with your pension intact is a feat not to be underestimated.

Your pension is a pot of money that is accrued over the course of your working life. Upon retirement, you should receive regular payments every year, in addition to a state pension. Although this is the anticipated norm for millions reaching the age of retirement every year, increasingly it is becoming the exception.

Put simply, the value of private in the UK have been badly affected in economically pressing times, and since the beginning of 2007, some defined contribution savings has dwindled by as much as 30%. As a result, many couples face retirement with financial concerns they believed they had well avoided.

If you find yourself struggling financially during retirement, you could benefit from releasing some or all of the equity in your home. Equity is the rolling accrual of profit between the market value of your property and the mortgage cost of your home, and any other debts levied against it. Ordinarily, this equity would be repaid to you as a lump sum from the sale of your property. However, if you plan to enjoy living in your home throughout your retirement, it might be worth considering releasing some of its value in the mean time.

A number of companies offer home equity release plans and there are typically two main products available - a Lifetime Mortgage or Home Reversion. A Lifetime Mortgage enables you to take out a loan against the value of your property, but still retain ownership of your home, while Home Reversion enables you to sell all or a part of your home for a cash lump sum, or regular income, but you must give up ownership of all or part of your property in return.

Once you have released the equity from your home, you can begin to live as you had planned into retirement. The security feature of home equity plans like these is that they are regulated by the Financial Services Authority. This means that, should you have any complaint about your home equity release plan or the company with which you are dealing, you could report them to the Financial Ombudsman Service, through whom you could seek compensation.

Before you consider releasing the equity from your home, your might consider alternative options for finding additional funds during retirement. You could consider renting out a room in your home as a way to earn a little extra money every month, and if you have the space, you could see anywhere between an extra £250 and £450 a month. Alternatively, you could benefit from selling your home and either downsizing, purchasing a cheaper property, or moving to a less expensive part of the country. Using existing savings or investments is an another option available.

Bear in mind also that releasing equity from your home could affect your tax position, your eligibility for means-tested benefits and the ability to move or sell your property. It could reduce - possibly to nothing - any inheritance that you decide to leave, while you also remain responsible for keeping your home in good repair throughout the duration of the plan.

To understand the features and risks of equity release, it would be wise to speak to a financial adviser, but whatever you ultimately decide, releasing home equity is a comfortable way in which you and your family can enjoy your retirement, the way in which you had planned.

This article has been written for information and interest purposes only. The information contained within this article is the opinion of the author only, and should not be construed as advice or used to make financial decisions. Expert financial advice should always be sought and any links contained within this article are included for information purposes only.

Tags: Financial, home equity, Lifetime Mortgage, pension savings

This entry was posted on Friday, July 17th, 2009 at 6:20 am and is filed under Home-Equity-Loans. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.