A new Equity Release scheme is being piloted in some areas of the UK. The Home Cash Plan, which is being run by Just Retirement, is designed to ensure that elderly homeowners do not jeopardise their state pension credits. The scheme keeps the amount of equity you can release to £30,000, and this is paid in installments. The first is £5,000 but subsequent payments can be as low as £2,000.

Each time the homeowner makes a withdrawal, the interest rate will be fixed at the prevailing rates.

It was found in a recent survey that many elderly homeowners who live on incomes of typically £200 per week, only needed an extra £20-£30 to make ends meet. This new scheme delivers a way of releasing money from the property, without accruing large savings. Currently, savings as low as £10,000 can severely reduce any pension credits that you may receive.

The plan has been checked by the Department for Work & Pensions. To comply with pension credit rules, any drawdowns must be on demand rather than pre-determined.

Tags: Elderly, equity release, Home Cash Plan, Just Retirement

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