How Equity Release could affect your means-tested benefitsPosted on: 25 February 2020 by Key Equity Release
Check whether your benefits eligibility could be affected by releasing equity from your home as a lump sum or drawdown plan.
One question you may have when considering equity release is how releasing the funds could affect other avenues of income. Equity release will reduce the value of your estate and may affect your entitlement to means-tested benefits. But, how?
Means-tested benefits such as council tax benefits or pension credits are available. The government or local authority will look at your financial assets and income as a means-test to see if you are eligible for these benefits.
Pension Credit - This may be available if you have not made enough National Insurance contributions to qualify for a full State Pension.
Savings Credit - A small additional payment of between £13.73 and £15.35 (amount dependent on whether you are a single claimant or married/in a civil partnership and reached State Pension age before 6th April 2016.
Guaranteed Credit - This payment tops up your weekly income if it is below £167.25 (for single people) or £255.25 (for couples).
Winter Fuel Payments - Usually available to those born before 5th May 1954 and can be between £100 and £300 a year. This is usually triggered automatically if you are eligible.
Council Tax Reductions - This could be available depending on personal circumstnaces including your income or family circumstances.
Find out which benefits you could be entitled to via the gov.uk website.
Taking out equity release can mean that you are no longer eligible to receive means-tested benefits you might have been entitled to prior to releasing equity. It is also important to let your benefit provider know that your financial circumstances have changed if you decide that Equity Release is right for you. Your equity release adviser will explain the ins and outs of the process and any means-tested benefits that may be affected. However, if you use equity release to pay off existing debt, this won’t affect your entitlement to means-tested benefits.
Do you want further information on your entitlements? Request a call back.
If you are thinking of releasing equity from your home, it’s important to speak to a qualified, expert equity release adviser. When you speak to your equity release adviser, they will help you decide whether equity release is right for you by ensuring you consider all your options. Using market-leading software to assess your circumstances, one of the things they look at is if equity release will affect your entitlement to means-tested benefits. Through your consultation, you should feel confident to make your decision and if equity release isn’t right for you, Key Equity Release will tell you.
You should always think carefully about securing a loan against your home.
If you have any questions and would like to know more, why not request a FREE guide from Key Equity Release?
Key Equity Release offer Lifetime Mortgages only, which is a loan secured against your home. Typically there are no monthly repayments as the loan plus roll-up interest is repaid when the plan comes to an end following death or entry into long term care. Remember equity release will reduce the value of your estate and may affect your entitlement to means-tested benefits.
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