Lease for Life calculator
For 78 years, Arthur May has lived in the same house, surrounded by cherished mementos of his long career as a Carpenter.
But despite still possessing a vice-like handshake that betrays his past profession, his health is not quite what it once was. Though celebrating his 78th birthday today, he is now confined to the ground floor of his house. When he is not in hospital, he is heavily dependent on carers who visit three times a day and do everything from preparing his food to putting him to bed. When his carers are not in attendance, his kindly neighbour in Chiswick, west London, keeps a close eye on him. His neighbour works from home and has an enduring power of attorney, which means she can sort out Arthur's finances should he be temporarily hospitalised and bills need paying. Arthur, who has never married, is an extremely proud man and is determined to end his days in his own home. 'My mother and father died here and I want to do the same,' he says. He shudders at the thought of going into a care home or moving to a smaller house, but the care he receives is not cheap - £1,200 to £1,600 a month. It is an expense he is able to bear because he has just released some of the equity in his home. He has done this by taking out an equity release scheme - a lifetime mortgage. These plans allow anyone from the age of 55 to tap into the value of their home without having to sell, move out, or make subsequent monthly interest payments. Instead, interest charges are deferred until the planholder dies, when the capital borrowed and interest are repaid from the estate. Lifetime mortgages differ from home reversion schemes - the other main form of equity release product. Here, a homeowner sells a slice of their home for a discounted cash sum. When they die, the slice goes to the plan company. According to latest figures, sales of equity release schemes are steadily rising. The sector's trade body, Safe Home Income Plans (Ship), says that sales are running at £1.2 billion a year with more than 30,000 new plans set up annually. Yet ignorance about equity release remains widespread. According to Norwich Union, the sector's biggest player, more than 50% of Britons do not know what equity release is.
But despite still possessing a vice-like handshake that betrays his past profession, his health is not quite what it once was. Though celebrating his 78th birthday today, he is now confined to the ground floor of his house. When he is not in hospital, he is heavily dependent on carers who visit three times a day and do everything from preparing his food to putting him to bed. When his carers are not in attendance, his kindly neighbour in Chiswick, west London, keeps a close eye on him. His neighbour works from home and has an enduring power of attorney, which means she can sort out Arthur's finances should he be temporarily hospitalised and bills need paying. Arthur, who has never married, is an extremely proud man and is determined to end his days in his own home. 'My mother and father died here and I want to do the same,' he says. He shudders at the thought of going into a care home or moving to a smaller house, but the care he receives is not cheap - £1,200 to £1,600 a month. It is an expense he is able to bear because he has just released some of the equity in his home. He has done this by taking out an equity release scheme - a lifetime mortgage. These plans allow anyone from the age of 55 to tap into the value of their home without having to sell, move out, or make subsequent monthly interest payments. Instead, interest charges are deferred until the planholder dies, when the capital borrowed and interest are repaid from the estate. Lifetime mortgages differ from home reversion schemes - the other main form of equity release product. Here, a homeowner sells a slice of their home for a discounted cash sum. When they die, the slice goes to the plan company. According to latest figures, sales of equity release schemes are steadily rising. The sector's trade body, Safe Home Income Plans (Ship), says that sales are running at £1.2 billion a year with more than 30,000 new plans set up annually. Yet ignorance about equity release remains widespread. According to Norwich Union, the sector's biggest player, more than 50% of Britons do not know what equity release is.