Margaret asks:

My position is that I am 65 this year and intend to cut back on my working hours.  I own one house outright and have a 50% share in another property - neither property has a mortgage.

Obviously my income will drop once I work fewer hours and as I want to retain my standard of living I plan to release capital from my properties only I'm not sure which method is best.  I don't want to sell my half share of the house in Devon as I plan to retire there eventually.

Would it be better to move to a smaller main residence thus releasing income that way or release equity on my current house which would be less hassle than moving?

Equity release is a term used to describe the various ways you can financially benefit from the value of your home. Equity release enables you to raise capital, income or a combination of the two while continuing to live in the property. You will be free to use the monies however you wish i.e. for home improvements, a much longed-for holiday or, as mentioned, to help maintain or increase your standard of living when you reduce your working hours.

I believe that equity release schemes can be extremely helpful, however they are not suitable for everyone. Taking a lump sum from the value of your home, plus the mandatory and associated legal costs will reduce the amount of equity owned by you and, because of these costs, equity release schemes can be seen as expensive and inflexible, especially if your personal circumstances unexpectedly change in the future.

Selling your property and moving to a smaller property (downsizing) should also be placed into the mix.

The only way for you to fully explore all your options, discussing the advantages and disadvantages of each one is to ensure you seek qualified financial advice from an adviser with the appropriate examinations, they will be able to personalise each choice and help you make not only an informed decision, but the right one for you.

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