Individuals on income-related benefits using an equity release scheme could benefit from recent legislative changes introduced by the government.
This is according to director general of Safe Home Income Plans (SHIP) Andrea Rozario, who told the Financial Times that the changes will allow equity release plans to be taken out without them affecting certain benefits, which are sometimes reduced or stopped altogether.
"Most recently, the government has clarified the position of equity release in relation to Support for Mortgage Interest (SMI)," she explained to the newspaper.
SMI is targeted at those receiving one of a number of social security benefits, including pension credit, and works as a contribution towards the cost of housing.
The government’s changes also apply to the rules on applying for an assessed income period within pension credit for individuals aged 80 and over.
Thanks to the legislation, Ms Rozario went on to say, pensioners can keep hold of £10,000 is savings without it affecting their benefits.
SHIP was established in 1991in response to a growing need for consumer protection for those taking out an equity release scheme.
Posted by Tom Papworth
