Home Income Plans
With a home income plan you can generate an income for life by investing the equity from a home reversion scheme or life time mortgage into an annuity, similar to traditional pension scheme. You may still be able to release a cash lump sum in the process.
An annuity plan is what is usually purchased when you retire and provides a series of payments from the pension lump sum. Annuity rates, your sex and your age when you take out the plan can affect the income you receive.
Advantages and disadvantages of home income plans
The benefits of home income plans depend on whether equity is released through a lifetime mortgage or a home reversion plan, however annuities have their own points to consider:
Annuity Advantages
- A lifetime annuity guarantees that income will be paid for the rest of your life
- Income is provided with a level or increasing amount every year
- A higher income can be derived from a home income plan than from a stand alone annuity
Annuity Disadvantages
- Annuities are not reversable after purchase
- If you should unfortunately die soon after taking out the plan then you will loose out unless you've taken out insurance to protect against it.
Cestria Capital offer financial advice on a range of products, including home income plans, that suit your individual circumstances. Contact us now for professional advice on a range of equity release solutions.