Scottish Widows Bank has become the latest provider to enter the equity release market. Enabling ...
Scottish Widows Bank has become the latest provider to enter the equity release market.
Enabling homeowners over the age of 60 to access capital tied up in their property, the Scottish Widows Bank Home Equity Plan provides a simple solution for older clients that are asset rich but income poor.
The loan, which is secured against the value of the property, is backed by a number of guarantees. Borrowers can live in their home until it is sold, either on death or following a move into a nursing home. They can also be reassured they will never have to pay more than the open market proceeds on the property when the loan is repaid, or that the house will be repossessed if the accumulated debt exceeds the property value.
The lender, however, is yet to decide whether to join Safe Home Income Plans (SHIP), the trade body for equity release providers.
Rob Golbourn, managing director of Scottish Widows Bank, said: 'We have built in all the protection required by SHIP, if not more, we just want to decide whether it will be beneficial or not for us to join.'
With an estimated 75% of 60-69-year olds owning their own property, the plan is expected to be popular. Golbourn said: 'Releasing some of the potential tied up in bricks and mortar allows retired homeowners to provide for the future by making use of the value of the property in their lifetime.'
While many will use the loan to boost their income, Golbourn added that some are likely to put the money towards inheritance planning as well as funding long term care.
l Key Retirement Solutions, the network of IFAs specialising in equity release, has launched a new reversion plan. The scheme claims to release 35% more than mortgage schemes. Other benefits include free buildings insurance.
