Safe Homes Income Plans has been lobbying to raise the minimum level to safeguard equity-release clients’ state benefits. With capital disregard of £6,000, drawdown schemes set at a minimum of £10,000 jeopardise benefits.
Ship says once the disregard is raised to £10,000 from November, this could boost equity release take-up. Director general Andrea Rozario says: “Advisers were worried about explaining the risks of drawdown for borrowers on state benefits. Now, with capital disregard to be raised, no one’s benefits will be at risk when they take out tranches of £10,000.”
Equity Advice managing partner Stuart Wilson says this is positive for equity release but there is much that the Budget failed to achieve for pensioners: “This is painting portholes on a sinking ship – pensioners are still being hit hard by inflation. The Budget needed to offer a root-and-branch reassessment of long-term financial strategies.”