Key Retirement Solutions, the UK’s number one independent equity release specialist, highlights what the benefits of the change announced by the Chancellor, Alistair Darling, will be for those aged 60 and over who are in receipt of, or may be eligible for, Pension Credit.
In his budget speech the Chancellor said: “For over a decade, the capital disregard on Pension Credit has been at £6,000 or below. It means savings above this level reduce the amount of help households get through Pension Credit. I believe it is now time to increase these limits.”
Effective 2 November 2009, the increase will see the capital disregard for Pension Credit increased to £10,000. This means that under means-testing those eligible for Pension Credit will be allowed capital up to this level without it affecting their benefits.
Whilst the change means that those already with savings of £6,000 or more, and claiming Pension Credit, should see an increase in benefits, this also means that those who may wish to release capital from their homes through an equity release scheme will be able to release greater funds than previously.
Dean Mirfin, Key Retirement Solutions Group Director, said: “This is a greater significant step than many may realise as typically the minimum advance from the more popular equity release providers is £10,000. This not only opens up more pensioners to the prospect of equity release but it does so in a way which will leave their entitlement to Pension Credit in tact. The change, according to the Chancellor, will benefit over half a million pensioners.
“Pensioners should be encouraged to release equity from their homes, not discouraged. This step by the Chancellor goes some way to benefitting those who would otherwise see a reduction in benefits as a result. The government can, and indeed should, do more to encourage pensioners to improve their quality of retirement through equity release.”
For those already in receipt of Pension Credit, who have capital of over £6,000, the Pension Service will re-calculate their levels of entitlement effective from 2 November 2009.
For anyone looking to release equity from their home to help ease the financial burden in retirement, key’s independent guide to equity release is the best place to start. This can be obtained by calling 0800 531 6010 or visiting our website https://www.keyrs.co.uk/free-guide where the guide can be downloaded.
