David and Joan were looking to make home improvements, replace their car and pay off credit card debts. They had little savings but owned their home, so we recommended Equity Release.
David and Joan, 78 and 76 respectively, are both receiving their State Pensions. David is also receiving an Occupational Pension, and he is still working.
They live in a large detached property, which they purchased in 2007. The property is now worth £450,000, and there is no mortgage. At the time they came to us for help, the couple had a small cash reserve of under £5,000.
David and Joan wanted to make some home improvements. The kitchen and bathroom needed replacing, and redecoration was required. They had already started some landscaping work to make the garden easier to manage.
The couple also had some lifestyle improvements that wanted to make. Their car was over 15 years old, and David felt sure it wouldn’t pass its next MOT; even if it did, it would require a large expense to keep it running.
Additionally, David was repaying credit card debts of £31,200 from his earned income, at £860 per month. His employment is on an annual renewable contract; he did not think this would be renewed beyond 2019, so he was worried about his ability to keep up payments.
We arranged an Equity Release Mortgage, with an initial advance of £40,000 and a cash reserve of £36,500.
The work required on the house could commence immediately, and the landscaping work was completed without exhausting their emergency cash reserve.
David and Joan could replace their car immediately too.
David is no longer worried about his employment contract not being renewed. Should this be the case, he can draw additional funds from the reserve to clear the credit card debt, relieving them of the £860 monthly repayment obligation.