Financial Uncertainty Calls for Equity Release
The entire world is currently facing a period of uncertainty due to the Coronavirus pandemic. On-going financial stability is at the top of everyone’s priorities list. And in the current climate, people of all ages are scrambling for capital and ways to manage personal finances.
In a poll of 10,000 adults in 12 countries, global market research and a consulting firm, Ipsos suggests that there is rising anxiety about personal financial exposure, including employment. The perception of threat to health increases with proximity to hotspots, despite social distancing measures and travel bans in place across large areas of the world.
The UK government has announced £30 billion of additional support for public services, individuals and businesses experiencing financial difficulties due to the impact of COVID-19. This includes a new £5 billion COVID-19 Response Fund to provide any extra resources needed by the NHS and other public services to tackle the virus.
What this means for all businesses and self-employed people amidst financial distress – with outstanding tax liabilities – may be eligible to receive support with their tax affairs through HMRC’s Time-To-Pay service.
Despite taking a hit due to coronavirus, eMarketer expects a total media ad spending worldwide in 2020 will reach $691.70 billion, up by 7% from 2019. And with a huge increase in ad spend across the financial industry we are asking people to make equity release part of their consideration process and here is why.
What about Credit Cards and Personal Loans?
Both credit cards and personal loans are being advertised widely at present, with major worldwide banks and credit card companies offering additional relief throughout the coronavirus outbreak.
Taking out both a new credit card and/or personal loan would ease the financial burden caused by COVID-19 but will ultimately come back to bite you in later life due to the exorbitant levels of interest. The below displays average interest rates across the board: –
CREDIT CARD – 21% AVERAGE – CREDIT CHECKS (The Balance)
PERSONAL LOAN – 9% AVERAGE – CREDIT CHECKS (Experian)
EQUITY RELEASE 5% AVERAGE – NO CREDIT CHECKS (Money Saving Expert)
Equity Release – the standout solution
Equity release can provide you with a large sum of money to spend while enabling you to continue living in your home. It can be particularly useful for covering large expenses later in life, such as long-term care and helping loved ones get on the property market.
Our latest UK economic downgrades mean that it is now inevitable that there will be a big hit to commercial property values, which we expect to fall by around 10% this year. And with the addition of lowered mortgage rates, there has never been a better time to get on the property ladder.
There are predominant reasons that make releasing equity on your property the standout financial solution.
When releasing some of your home’s value, not only does it enable you to live in your home rent free for the rest of your life, but the money released tax free.
If you are retired or over 55 and are no longer part of the workforce, the likeliness of being accepted for a personal loan or credit card is very close to zero. With equity release there are no credit checks and you just need to own the property.
There are a number of different schemes available. Under a Lifetime Mortgage you can choose to either pay the interest each month to avoid the debt increasing, or simply allow it to be continually added to the amount borrowed. Alternatively under a Home Reversion plan you can sell some or all of your homes ownership to provide a lump sum of money without needing to pay any rent
All Equity Release Council approved schemes offer ‘no-negative equity guarantee’, which means you can be assured that any debt you create, plus any on-going interest which you might choose to add to the sum borrowed, will never become more than the property’s future value when you die.
Any reduction in the amount you release could significantly reduce the long-term cost of the plan and allow you access to better deals with a greater amount of flexibility.
For further advice on how to start out on your own equity release journey, please take a look at UKeo’s Equity Release Guide.
For the most up-to-date advice for employees, please visit GOV.UK’s COVID-19 guidance page.
If you are feeling the effects of the on-going global pandemic, please visit the Citizens Advice website.
For the most up-to-date news and information about the coronavirus pandemic, visit the WHO website.