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Home Income plans

These used to be the most popular type of equity release plans. You take out a mortgage against your home and use the money to buy an annuity which guarantees you an income for life. Mortgage payments are deducted from this monthly income, although the original capital is only repaid from the sale proceeds, normally after you die.

These are generally offered by banks or building societies

Good points

• Regular income for life and the mortgage interest is deducted automatically.
   

• The amount you owe is fixed and any increase in the value of your home belongs to you or your family.

Cons

• Not suitable for those looking for a substantial lump sum.
   

• Income is normally fixed at outset, so will be eroded by inflation.
   

• Built-in annuities are not the most competitive – you are generally better off shopping around for an annuity  (if the plan permits this) or investing the money elsewhere.

If you have an old style Home Income plan, it may be possible to redeem it and incorporate its value within a new plan.

Just complete the form and we'll ring you to discuss your options, or call free of charge 0800 0025 161