Anyone who has read any of my blogs should have got the idea by now that I am passionate about people making decisions about their money based on asking the right questions and getting the right information. Last week I posted the picture shown below on twitter as a way of encouraging people to read a series of blogs on Equity Release. The response was amazing, with more views than I have ever seen before and a number of comments that kindly indicated that people found them useful. The picture below though did open a train of thought that I hadn’t expected. As you can see, the first thing written on it is the phrase “For the right person”. This obviously was a bit obscure to a couple of people who questioned the use of Equity Release for the purposes subsequently listed. had I not put “For the right person” in the picture, then I would probably had some sympathy with the argument. But I did, so there is no sympathy! However, it did raise the idea of just what you should be allowed to do with your own money?
In a blanket reply someone dismissed all the suggestions on the list as not being appropriate as a reason for taking an Equity Release plan. If you haven’t read my blogs on Equity Release, it may be a good idea to have a quick look here for an idea about just what they are. Dismissing anything in such a way is obviously just as daft as saying it is a brilliant idea for everyone, but a more fundamental question goes along the lines of “If I own a house and I meet the criteria to take an Equity Release plan, who’s business is it but mine what I use the money for?”
When I was actively involved in arranging these plans, the application always asked what the money was to be used for. I never had a problem with the provider questioning the answer or turning the application down because they didn’t approve of the purpose. I’d like to think this was because a serious discussion, including all the consequences of taking the plan, were talked through thoroughly first.
More than most products, an Equity Release plan is personal. Sometimes the reasons for taking one out are obvious. Take the “Home improvements” idea and look at it from two extremes. A couple in their seventies have mobility problems, and they are set to become worse. With no other means available to them an Equity Release plan will provide the funds to install rails around the house, fit a stairlift and turn a bathroom into a wetroom. All of these things will improve their quality of life many fold. The next situation involves a couple of the same age, no health issues and a life long obsession with steam trains. After years of planning they have finally decided to convert their loft into a model railway, complete with purpose built access to the loft and only the best quality scenery and engines. It may be that those who feel that Equity Release should only be used for “proper” reasons would approve of the first couple but not so the second. But why?
Far beyond the debate about whether a model railway is a good use of money is the more disturbing question about who has the right to tell someone what to do with their own money? Do these people who disapprove of model railways confront BMW drivers because the car is on finance and the owner should have bought a cheaper vehicle that could be bought outright. I might actually have some sympathy with that argument, however – it’s none of my business!
The fact is that everybody’s circumstances are different as are their needs and aspirations. If you are thinking of taking an Equity Release plan then what you want the money for is important, but it’s important to you-no one else!