Last updated 05:34, Friday, 06 June 2008

After years of working hard, you should expect a carefree and enjoyable retirement. We’re not talking about yachts or world cruises.

Relax: Equity release means you can free up cash without having to sell your house and move

You might simply want to free up some cash to make your home more comfortable, for instance. Or just do some of the things you enjoy doing.

Whatever your dreams are of the perfect retirement, finding the money to make them a reality can prove difficult. This is where equity release could help you.

Equity release plans allow you to safely release equity from your home, spend the cash as you wish, make no monthly repayments and stay in your home for life.

Like many homeowners, you may have seen a substantial rise in the value of your property over the past few years.

This is comforting, given that many people have been disappointed in the performance of the pension they’ve invested in.

For these people, their home may be their biggest asset as they near retirement age.

Thousands of homeowners across the UK have been helped to make the most of their finances in retirement by safely releasing equity from their homes with an equity release scheme. 

Many of them took the opportunity to make some home/garden improvements, buy a new car, take regular holidays and short breaks, treat family and friends and improve or maintain their lifestyle.

Equity release is a financial product designed to unlock some or all of the cash tied up in your home without having to move.

There are lots of reasons why equity release could be considered as a solution to meet your financial needs one may be that your pension fund is simply not enough to see you through your retirement.

A survey of 11,500 over-50s revealed that they are spending their children’s inheritance on new cars, luxury holidays and even golf club memberships.

Of those questioned, only 12 per cent agreed that they should leave their homes untouched for their children to inherit their full value instead of taking out cash through equity release.

Parents told the survey, commissioned by Saga, that they want to use the money from equity release to enjoy themselves.

One third of 50 to 54-year-olds and one-in-five over 65s said they wanted to use the money to travel around the world.

The Council of Mortgage Lenders has calculated that around £2,500 billion of equity is tied up in homes.

It is important to remember that advice and education play an important role in ensuring you get the right product to suit you.

We’d strongly suggest that you discuss equity release thoroughly, both with one of our financial consultants and with your family as it is important to be aware that taking a lump sum plus the costs will reduce the value you have in your home and therefore the amount of any inheritance you leave.

All the important decisions will be yours and you will remain in control throughout.

Only you can decide if equity release is right for you – and only by considering it in relation to your own personal circumstances.

As with most major financial arrangements, it takes some time to organise and put into action.

The Cumberland Building Society works in partnership with Norwich Union to offer you full and professional advice on equity release and many other financial planning needs.

If you would like further information on equity release products offered through the Cumberland Building Society, please contact one of our financial consultants at your local Cumberland Building Society branch.

Any financial advice will relate only to the products and services of the Cumberland Building Society and Norwich Union.

Steve Hardman is financial sales controller at the Cumberland Building Society. Visit the website at www.cumberland.co.uk

This article should not be relied upon when making investment decisions.

Always obtain financial advice.