It is now becoming more apparent that whereas equity release was once considered a lifetime mortgage, people ‘temporarily’ have the opportunity to take advantage of one of providers’ shortcomings in its plan features.

As equity release has been designed to run for the rest of the person’s life, lenders have always seeked to include potentially heavy early repayment charges, should the scheme be redeemed early.

This penalty could be either linked to the change in government gilt rates, expire after a set number of years or as we shall discuss; linked to the Bank of England base rate.

It is this feature that has provided a window of opportunity should people over 55 require short term borrowing facilities.

Experience has recently shown that retired clients are now struggling in retirement; income from investments has fallen, annuity rates are not favourable & pensions are falling in popularity with more reliance on fund performance & contributions than defined benefit schemes.

Increasingly more debt is also evident in this age group & control of finances is becoming more difficult to manage in the present economic climate, credit cards & loans seeming the preferred choice.

Nevertheless, there are options available that can resolve these issues – part time work is becoming more apparent to increase retired incomes. Better management of debts & more consumer information being available as the silver surfers become more online savvy.

Advice on the suitability of equity release schemes will primarily discuss all these options & more. Should none of the alternatives be suitable from the client’s point of view, then at this point, equity release can be considered as a last resort.

However, another one of these options would be downsizing.

This would involve the emotive issue of selling a property that may have been a family dwelling for a generation. However, in order to raise the necessary funds required this may be the correct solution.

Unfortunately, this option may not provide an immediate resolution.

House sales are eventually beginning to rise, however this is marginal at present & for someone who requires funds as soon as possible, today’s marketplace could prove an obstacle.

But all is not lost – & this is where a temporary bridging facility is available & can be provided by a current equity release provider.

Subject to eligibility, the Prudential’s equity release schemes can meet this objective.

By releasing equity now with Prudential you would be benefiting from their link with the Bank of England base rate & early repayment charges.

In summary, the Prudential equity release schemes will only levy a penalty should the Bank of England base rate fall from inception to the time of repayment. With this rate at an unprecedented low rate of only currently 0.5%, it is highly unlikely (but not impossible) that the rate would be lower than 0.5% in the future.

It can therefore be safely assumed that if either of the Prudential’s equity release plans are taken out, whether it be their single lump sum product or innovative increasing cash reserve plan, NO early repayment charge would apply.

Therefore, this can be great news therefore for people who have debt issues or need access to short term funds & not have it affect their tight budgetary constraints. With no monthly repayments required, clients can raise funds this year & after a 12 month period could repay in full or partially, with only a deeds release fee of £105 being levied.

This could tie in conveniently with the property market improving around this period of time.

With Prudential’s interest rates currently as low as 6.3%, this is an excellent time to consider this form of borrowing for eligible people over age 55.

So while the Bank of England base rates remains at just 0.5% it would be advisable to consider the Prudential plan as a means of short term borrowing or bridging finance, depending on requirements.

The Prudential’s Increasing Cash Reserve plan comes with a free valuation & £300 cashback on completion until 31st December 2009.

So all’s not so gloomy in the equity release market as some would suggest.

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 equity release 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

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