Equity release has become an increasingly popular option for homeowners aged 55 and over who wish to access the equity tied up in their property without having to sell it outright.

However, despite the many benefits of later life lending, there are still several myths and misconceptions surrounding this financial product that can make people hesitant to pursue it.

In this article, we’ll take a closer look at five of the most common myths about later life lending and explain why they are not true.

Myth #1: Equity release is risky and unreliable

One of the most significant myths surrounding later life lending is that it’s a risky and unreliable option that could leave you owing more money than your home is worth.

This was true in the past, but the regulatory framework surrounding later life lending has improved significantly in recent years, and there are now strict rules in place to protect consumers.

In fact, later life lending is a safe and regulated option that can be a good choice for many homeowners.

Myth #2: Equity release is only for people who are struggling financially

Another common myth about later life lending is that it’s only for people who are struggling financially.

While it’s true that later life lending can be a good option for people who need to boost their income, it’s also a viable option for people who want to make the most of their assets and enjoy their retirement without worrying about financial constraints.

Myth #3: Equity release will leave you with no inheritance to pass on to your family

Many people believe that later life lending means they will have nothing left to pass on to their family when they die.

However, this is not necessarily true. With a lifetime mortgage, for example, you can choose to ring-fence a portion of your property’s value as an inheritance for your family.

Myth #4: Equity release will affect your ability to claim benefits or access local authority services

Another myth surrounding later life lending is that it may affect your ability to claim benefits or access local authority services.

Cash released is not typically classed as income as it is a loan. However, any money kept as cash in savings could take you above the savings thresholds to receive the benefit.

Myth #5: Equity release is not regulated

Some people believe that later life lending is not regulated and that they could be taken advantage of by unscrupulous providers. However, this is not true. The Financial Conduct Authority (FCA), the UK’s financial regulator, oversees the later life lending sector and has implemented strict rules to protect consumers.

The Later Life Lending Council, the industry body that represents providers and advisors in the later life lending sector, is also committed to ensuring that consumers are protected and that later life lending products are fair and transparent.

In conclusion, later life lending can be a viable option for homeowners aged 55 and over who wish to access the equity tied up in their property.

While there are still some myths surrounding later life lending, the market has improved significantly over recent years, with tighter regulation and more significant protections for customers.

By working with an advisor who is registered with the Later Life Lending Council, you can be sure that your interests are being prioritized, and you are making an informed decision about your financial future.

If you have any questions about later life lending or would like to explore how later life lending could help you, please do call our team on 01322 553 282 or contact us online.

An Later Life Lending product will reduce the value of your estate left to named beneficiaries. Equity release may not always be suitable for you and could affect your entitlement to state benefits.

You must contact a certified later life lending advisor and weigh upon the advantages and disadvantages before you decide if it is right for you.