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Have Your Say: Equity Release

A house

There are moves to change the law so retired people who raise money on their home do not lose means-tested Pension Credit.

It has been estimated that there are more than two million older people living in accommodation worth more than £50,000 but on incomes so low they get means-tested benefits.

Many of those people might consider releasing money from their homes but the complex benefit rules are putting many people off.

We asked for your comments, a selection of which are below. This debate is now closed.


This is not the time to be taking out equity release as the price of houses has fallen but inflation for building work and materials has gone up. If you spend your money as soon as you get it, it makes no difference to your benefits. I got equity release to refurbish my roof which leaked horribly and it was a godsend as I could not have afforded it otherwise. It works well when house prices are high and inflation is low.
Marion Monahan

There is no doubt whatsoever that this discredited Labour Goverment only benefits the feckless and the lazy in this country. As a pensioner I am one of the ones who saved but am penalised by the Pension Credit for the capital I have.
Brenda Terry, Lewes

Any increase in capital is not taken into account by The Pension Service during a five year Assessed Income Period. It is only reviewed at the end of the five year period. For Council Tax Benefit, no change will occur whilst a pensioner is in receipt of Guarantee Pension Credit. They will continue to receive full Council Tax Benefit. If a claimant is only in receipt of Pension Savings Credit, they will lose Council Tax Benefit if their capital exceeds £16,000. However, if they have sought equity release to undertake home improvements, or for a holiday, or to buy essential items, which might for example include a car, that capital will not be taken into account. They are likely to have to prove their expenditure, but will not lose out on Council Tax Benefit if they can. The most likely to lose out are those on Pension Savings Credit only who seek equity release and simply keep it in their bank account without having plans to spend it.
Drew Kimber, benefits officer, Craven District Council

The whole basis for eligibility for benefits should be reviewed. If you have million pound home but no other assets (at least declared) you are eligible for Pension Credit having not saved either into a pension plan or even paying National Insurance, as well qualifying for Council Tax support. Those that have provided for their retirement are penalised to benefit those that haven't. This seems inequitable. Very obviously the Labour Government sees no electoral benefit as its constituency is the feckless rather than the conservative who have saved. Certainly the value of a property must be taken into account for pension as well as other state benefits, with other assets, otherwise one assumes that put all your money into your main residence and have no other capital or income.
Darrum, Brighton

The comments we publish are not necessarily the views of the BBC but will reflect the balance of views we have received. It is helpful if contributors state if they work for any organisation relevant to an issue discussed. Readers should form their own views on whether messages published represent undeclared interests, or views prompted by a common source.

Money Box



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Equity release: your questions
03 Mar 09 |  Moneybox
The ins and outs of equity release
04 Oct 07 |  Business
Releasing equity from your home
24 Apr 07 |  Business

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