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How Equity Release Can Help Over-55s: Using Equity Release to Navigate Rising Inheritance Tax

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How Equity Release Can Help Over-55s: Using Equity Release to Navigate Rising Inheritance Tax
For homeowners over 55, property is often their most valuable asset, yet much of their wealth remains tied up in bricks and mortar. With rising living costs, growing financial pressures, and a record-breaking increase in inheritance tax (IHT) receipts, equity release offers a viable solution for those looking to access their home’s value while maintaining financial independence.

 

The Rise of Inheritance Tax and Its Impact

Inheritance tax receipts have surged to record highs, with HMRC collecting £5.7 billion between April 2023 and January 2024. Forecasts suggest this figure will continue climbing, reaching £9.7 billion by 2028/29. The freezing of tax thresholds and rising property prices mean that more estates are being drawn into the IHT net—impacting families who may not have previously expected to pay.

As discussed in Mortgage Strategy’s blog, property wealth plays a crucial role in financial planning. With the right approach, this wealth can be unlocked to help fund retirement, support family members, or mitigate potential IHT liabilities.

 

How Equity Release Can Help

Equity release, particularly through a lifetime mortgage, allows homeowners over 55 to access tax-free cash from their home while retaining ownership. The loan, plus any accrued interest, is repaid when the homeowner passes away or moves into long-term care. This provides a flexible way to:

  • Boost retirement income – Supplement pensions and savings with tax-free cash
  • Gift to family while reducing IHT – Financial gifts given more than seven years before passing may not be subject to IHT, helping loved ones when they need it most
  • Cover rising living and care costs – Ensure a comfortable lifestyle without needing to sell the family home

 

The Role of Key Partnerships

Financial advisers have a vital role in helping clients navigate equity release as part of their broader financial planning. However, as equity release is a specialist area, working with an expert referral partner ensures clients receive regulated, tailored advice without referees needing to be qualified in this complex market.

Key Partnerships work with advisers at The Equity Release Experts to ensure your clients get the specialist advice they deserve. By partnering with Key Partnerships, you can have the certainty that:

  • Your clients receive whole-of-market advice tailored to their needs
  • You generate an additional income stream through referral fees (should your clients proceed with the recommendations)
  • You and your clients are kept up-to-date throughout the entire advice process

To learn more about partnering with Key Partnerships, please contact us today.

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