Equity Release to Benefit From Novembers New 10,000 Pound Pension Credit Limit
This November, under the budget changes made in April, sees the pension credit limit being raised from £6,000 to £10,000. The effects of this would be felt by over 500,000 pensioners on modest incomes & should result in additional income of upto £8pw.
The current capital disregard limit of £6,000 has been present for the past decade. Previously, any savings above this level of savings reduced the amount of benefits a person would get from pension credit.
However, The Chancellor – Alastair Darling has stated this is to change from November. This increased limit to £10,000 will benefit pensioners on low incomes in different ways.
One will be the direct benefits will be in the pocket.
However, a further implication of this will be on people considering releasing equity. Previously, anyone receiving pension credit with savings over £6,000 & considering releasing equity would lose £1pw for every £500 over the limit they went.
Subsequently, with this limit now being increased to £10,000 it results in the additional £4,000 allowance providing people with upto an extra £8pw.
This was a major factor in any equity release advice provided. As part of any advice & fact finding process the adviser should ascertain whether means tested benefits are being received.
However, the resulting advice would limit any equity release to the provider minimum of £10,000. This being above the £6,000 limit could result in a loss of benefits, unless immediate capital expenditures were being made or an Income Assessment Period (AIP) was still in force.
Therefore, Novembers increase to £10,000 will rule out this potential loss of benefits on such withdrawals & as a direct consequence will result in more pensioners confidently taking out equity release schemes.
About The Author:
Mark Greggs is the founder of Equity Release Supermarket who were recently accredited ‘Best Financial Advisers’ at the Equity Release Awards 2008. Mark is an experienced Independent Financial Adviser who has now been providing quality equity release advice for the past 8 years.
Gained with this experience is exclusivity to deals with some of the UK’s leading financial providers.
Mark aims to pass on his experience in assisting the over 55’s decide whether releasing equity is the right choice for them.
For further information or to compare equity release deals available go to:
w: http://www.equityreleasesupermarket.co.uk
e: mark@equityreleasesupermarket.co.uk
Article Source: http://EzineArticles.com/?expert=Mark_Greggs
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