Equity release schemes can provide a much needed cash boost to older people who own their home outright and are struggling to enjoy their retirement due to a lack of income.

Rather than leaving their wealth tied up in their biggest asset, equity release allows over-60s and in some cases over-55s to enjoy a comfortable standard of living during retirement by trading equity in their home for a tax-free lump sum. There are a number of different equity release schemes available and specific types will suit some better than others, but the fundamental principle is the same; the lender recovers their debt as a proportion of the property upon the homeowners death.

The average house price in the UK in July 2008 was between £176,000 and £220,000 depending upon which of the many property surveys you believe; either way this figure is a substantial amount to have tied up in property for those with little income. Equity release is a special financial tool designed to enable some of the intrinsic value to be taken out of the property and used to improve the lifestyle of the occupants.

But, equity release schemes don’t just appeal to those on reduced retirement incomes, other over-60s may enjoy a reasonable pension but wish to make a major purchase and do not have the necessary retirement savings or access to credit to finance such a purchase. They too can benefit from equity release to acquire their special purchase, and perhaps enjoy a new lease of life in their latter years.

One big advantage with equity release is that occupants do not have to sell their home to free up funds. Although some older people may choose to downsize and move to a smaller property to release cash, others may not wish to go through the inconvenience and cost of moving and therefore could consider equity release as a viable proposition. Anyone without children or immediate family may well wish to consume the value of their property while they are still alive, yet continue to live in it. Equity release is a more attractive proposition for those in that situation.

Furthermore, equity release allows you to obtain funds that you can then use for whatever purpose you so desire, which could include making those new improvements to your home that you have always wanted or perhaps even taking a well earned luxury holiday.

In that respect, equity release allows you to enjoy your home whilst at the same time reaping the benefits that you choose to come with it.