It seems to be quite the norm to be privy to a chat about ‘equity release’ at dinner parties. Having shaken off association with “viatical” schemes, second hand endowments and the like, it’s positively “de rigueur” these days, and what’s more the number of advisers focusing on this area of advice are insufficient to cope with the rapidly growing market, the expected valuation of which is to greater than £2bn this year alone. 

The opportunity is right now! The FCA have abandoned plans to introduce an additional qualification for advisors at the current time, and it really is part of the modern holistic financial plan, with pensions now being a valuable source of inheritance tax planning, and the family home increasingly being seen as akin to a deposit account to bolster IHT planning, care plans, and retirement income.

The schemes fall into two camps, home reversion or lifetime mortgages. The relevant FCA permission is called Home Reversion. And to change your permission, if you haven’t got it, costs £250 plus you need an ER1 exam qualification.

With careful planning, these schemes, be it ‘reversion’ or ‘life time mortgage’ schemes, really can lighten the load for retirees, but it takes a skilled adviser to maximise opportunities for clients. Clients with the need for quality holistic planning that includes their home are increasing in numbers, and coupled with detailed trust knowledge and advice, there is an opportunity to reduce IHT liability in some cases….. A scary thought, the total IHT receipts for 2015-16 were more than £4.5 billion!

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