What impact will it have on my benefits and income tax position?

Equity release impacts on benefit entitlements because it is classed as income and therefore it may mean that you are allowed less money or no money at all through the benefits system. Financial advisers should be able to weigh up the pros and cons for your individual situation and tell you whether you will lose out by taking equity out of your home as an effect of losing access to means-tested benefits.

Most people who sign up to equity release schemes are above pension age; nonetheless, this isn’t always applicable and it is important to ensure that you are familiar with the benefits system and how equity release may affect your eligibility. You should always try to find certified advice from an independent financial adviser before you sign up to equity release. The following are benefits related to equity release:

Benefits for people under pension age:

  • Income-based jobseeker’s allowance.
  • Income support.
  • Council tax benefit.
  • Income-based employment and support benefit.
  • Health benefits (including free prescriptions/dental care/glasses, for example).

Benefits for people over pension age:

  • Council tax benefit.
  • Pension credit.
  • Health benefits.

Benefits not affected by equity release:

  • Carer’s allowance.
  • Incapacity benefits.
  • State pension.
  • Attendance allowance.
  • Child benefit.
  • Disability living allowance.