Many people in retirement are on a fixed income. Overtime inflation reduces the buying power money. If you own your own property a way of providing more income could be through releasing equity tied up in your home.

Equity Release is the term used to describe the different ways in which you can benefit from the value of your home without having to move out of it. You can either take a loan secured on your home or sell part or all of your home to give you a regular income and/or a lump sum.

There are two main types of schemes. These are called Lifetime Mortgages and Home Reversions.

Lifetime Mortgage – with this option you take out a loan secured on your home. This mortgage may be a home income plan, interest only mortgage or a roll up mortgage. The mortageg is repaid from the proceeds of the sale of your home when you die, or if you move out of it perhaps in to a care home.

Home Reversion – with this option you sell all or part of your home to a third party, normally a reversion company or individual. In return you receive a regular income and/or a cash lump sum and you continue to live in your home for as log as you wish.

Some equity release lenders belong to an organisation called safe Home Income Plans (SHIP). Members of this organisation have to adhere to a number of strict guidelines the most important being the offer of a no-negative equity guarantee. This means that at no point will the amount outstanding on your Equity Release be greater that the value of your property.

Equity Release schemes can be helpful but they are not suitable for everyone. It is important that you seek advise both from a solicitor and an Independent Financial Adviser to ensure that all options available to you are considered and that you get the best possible deal to suit your own circumstances and needs.