Issue no.10 April 2019
L I F E T I M E M O RTG AG E
INSIGHT Retirement Included in this issue
It’s important to embrace technology By Paul Carter, CEO, Pure Retirement
Page 6
Housing wealth might provide a care funding solution By Sean Smith, Head of Public Affairs Equity Release Council
Page 8
Product flexibility and late life lending By Stuart Wilson, Channel Marketing Director, more 2 life
Page 12
Please note any information in this magazine is for registered intermediaries and NOT to be issued to members of the public.
Welcome To our April 2019 edition
Brexit and even the stall in house prices haven’t damped enthusiasm for lifetime mortgages, and advisers, and the lenders continue to come together to continually working together to help achieve clients’ goals, even as the growing interest in later life lending as created a client base with ever more diverse needs. It all contributes towards creating an ever-growing industry that we are proud to be a part of. We hope you enjoy the latest issue of Lifetime Mortgage Insight, please feel free to pass on and distribute. Thank you to the Pure Retirement marketing team for their continued assistance in helping put this publication together.
Jane Hanlon, Club Manager, The Premier Equity Release Club
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LIFETIME MORTGAGE INSIGHT
Contents 4 New 1-2-1 telephone tutorials 6 It’s important to embrace technology 8 Why housing wealth might provide a care solution for our ageing population 12 Product flexibilty and later life lending 13 Retirement interest-only mortgages - the legal process 15 Events calendar 16 Learning Zone 18 Tax and benefit guide 2019/20 20 Rate changes from January 2019 21 Contact details and extra service
LIFETIME MORTGAGE INSIGHT Issue no.10 April 2019
New 1-2-1 telephone tutorials
Available FREE to Premier Equity Release Club members!
Designed with you in mind! We’re now offering 45min – 1hr sessions with an independent expert covering a variety of topics, including: • New products • Starting out and growing your business • Equity release process refreshers • Independent sourcing tools and tips • Lender features and benefits • Individual cases- options, pros and cons etc • Legal process explainers • Creative ideas and changes in the market You choose the time, and our independent whole-of-market approach will help you navigate your way through the maze of the Equity Release Market.
To book please call 01326 567970 or email helpdesk@thepremierequityreleaseclub.co.uk 4
Retirement
Experts in Equity Release The power to change your clients’ future
More for your customers with our Fee
Applications to suit your needs: online,
Underwriters available as always for
Bespoke Marketing Support Team to
Dedicated Relationship Managers,
Brand new Mobile App and Improved
Contributions and Cashback options
you to speak to directly on the phone Broker Support Team and Face to face BDMs to visit you in the field
print, or even a hybrid of the two help you build your business
Case Tracking facilities in our refreshed online Portal
0113 3660 599 www.pureretirement.co.uk For intermediary use only. Pure Retirement Limited, 3175 Century Way, Thorpe Park, Leeds, LS15 8ZB Company registered in England and Wales No. 7240896. Pure Retirement Limited is authorised and regulated by the Financial Conduct Authority. FCA registered number 582621.
SOVEREIGN RANGE
LIFETIME MORTGAGE INSIGHT Issue no.10 April 2019
It’s important to embrace technology Retirement
By Paul Carter, CEO, Pure Retirement
It’s safe to say that the stereotypical profile of the slippers and pipe retiree has become a thing of the past. A glance at the wish lists of those entering later life points towards a demographic who are increasingly viewing retirement as an opportunity to fulfil lifelong ambitions of travelling, learning new skills and enjoying the finer things in life. The fact that walking football is the fastest growing sport in Britain at present - in addition to the popularity of veterans’ athletics - also demonstrates that we’re arguably also witnessing a generation of retirees who are more active than ever before. But as well as understanding their behavioural patterns in their day-to-day life it’s also worth taking a moment to appreciate their online habits, many of which make for eye-opening reading. For instance, the fastest-growing demographic among Twitter users is grandparents, with a 50% year-on-year increase in the number of over-65s using social media in 2018 compared to the year prior. Similarly, while those in upper age ranges prefer tangible and print-based media and information sources, those aged 50-59 are most like to get their information from online sources which again points to a change in the habits of the later life sector’s core audience.
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With those approaching, or who are already at retirement age, embracing technology and having a greater understanding of its possibilities, it’s perhaps more important than ever that the later life lending sector embraces technological solutions to help them achieve the retirement they seek, whether that technology be adviser or customer-facing. The rise in SMS-based surveyor appointment booking is a case in point, with consumers now able to control a part of the process to suit their needs, reinforcing the manner in which later life lending is empowering them in their retirement. The rise in powerful sourcing tools such as Iress has similarly made it more time-effective than ever for advisers to find the best products for their clients, giving them easy access to a wealth of tools and details to help make an informed decision at a time when there are more products and plans available than ever before. In the same way we’ve recognised the importance of enabling advisers with access to market-leading tools,
we’ve also sought to give advisers greater convenience when it comes to case management, which is why earlier this year we launched the market’s first broker-facing mobile app. An intuitive platform, it allows advisers to review cases, as well as offering a clear indication of the next stages of application and what - if any - input is needed from the adviser or client. The later life sector’s clientele are adapting to modern living at an unprecedented rate and we owe it to them to do likewise in our own activities, whether that’s through products which manage to remain suitable to customers’ needs or through technological developments that make the process as straightforward as possible for all involved, and we’re more committed than ever to delivering those developments, for the benefit of both our advisers and our end-point customers.
Join us at the Equity Release Council AGM Wednesday 24th April 2019 Council members are invited to attend the 25th Annual General Meeting of the Equity Release Council to be held at Eversheds Sutherland’s London offices on Wednesday 24th April 2019. Delegate registration starts at 10:00am and a lunch will kindly be provided by Eversheds Sutherland. Our AGENDA is taking shape and those speakers confirmed (with potential for more to follow) will be discussing interesting topics, including: KEYNOTE: John Glen MP – Economic Secretary to the Treasury Council business | Policy and Engagement: David Burrowes - Chairman, ERC Delivering on our strategy update: Jim Boyd – CEO, ERC Evolution of products in the market: Ray McCarthy – Head of Distribution, Answers in Retirement Evolution of our standards: Chris Pond – Chairman, ERC Standards Board Broker choice and competency framework: Donna Bathgate, COO, ERC LUNCH: A buffet lunch will be served courtesy of Eversheds Sutherland Early booking onto the meeting is recommended. RSVPs to attend the meeting should be sent to Sarah Hall at admin@equityreleasecouncil.com
LIFETIME MORTGAGE INSIGHT Issue no.10 April 2019
Why housing wealth might provide a care funding solution for our ageing population By Sean Smith, Head of Public Affairs, Equity Release Council
In 1917 George V sent a card to every centenarian in Britain. He sent 24. In 2016 the Queen will have sent 6000. In 2050 it is estimated a future monarch will send 56,000! This offers an insight into the dramatic growth of our ageing population. People aged 65 or over now make up 18% of the population1, with our very oldest and most likely to need care growing fastest. It is anticipated that those aged 85 or over will double in the UK over the next 23 years to 3.4 million2. Many of this generation do not wish to go into care homes where the average annual costs of fees for self-funders for care are significant. It is estimated that on average 44% of people in independent care homes in the UK paid for their own care3. Many would prefer to live longer in their own homes. However, to do so some may need to build a ground floor bathroom, or pay for additional care support and/or for new technologies to assist them. For those who do not have access to appropriate funds releasing some housing wealth may enable them to do this through an equity release plan. However, it is critical that customers for equity release plans are advised by regulated and properly qualified financial advisers to ensure the plan is right for them, understanding the impact of withdrawing funds on any remaining spouse and issues like inheritance tax and benefits. The Equity Release Council also requires that customers receive independent legal advice, which is an important safeguard to ensure customers understand the plan they are committing to, and the Council additionally encourages all members of the family to be engaged in these important decisions.
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As the equity release sector grows product options are also evolving to meet the needs of those who require care, and some plans can be secured against sheltered or age restricted properties, subject to the providers specific criteria at the time. Others anticipate significant life events, where if a spouse has died or gone into care the remaining person can pay off the amount of their plan in full without penalty within 3 years. However, an unforeseen benefit of housing wealth to meet the costs of care may result from future care funding proposals anticipated in the Government’s long-awaited Social Care Green Paper. These will seek to deliver a fair care funding solution across the generations, recognising that as the population ages, the cost of publicly funded social care in the UK is set to double over the next 50 years to £40bn4. It has been suggested that similar to Japan people will have to meet their costs of care by contributing to a social care insurance fund. This model requires citizens to continue to make contributions to this fund into later life. For those who do not have adequate savings to do so, perhaps they might be able to release housing wealth to fund their contribution? This will hopefully ensure that remaining assets are protected, which is viewed as one of the most unfair aspects of our current social care system. Again, housing wealth, provided it is properly advised, may provide a valuable care funding solution.
1 Living Longer – Office for National Statistics, August 2018 2 Later life in the United Kingdom -Age UK, April 2018
Laing and Baison, Care of Older People: UK Market Report, 28th Edition, May 2017
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Reform, Social Care – a prefunded solution. Daniel Vasilev June 2017
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LIFETIME MORTGAGE INSIGHT Issue no.10 April 2019
A helping hand from Hodge Making life easier so you can get on with what's important, looking after your clients
by Carys Frampton, Group content writer
Hodge is launching a campaign which will give the tools needed to do business in the later life lending space. Earlier this year we asked advisers what they’d like to see in 2019 and it was apparent support in building and promoting their business is a priority. To meet that need, we’ve launched the Helping Hand campaign which aims to deliver informative and useful content directly to advisers. Business development director, Tony Hall, said: “Hodge has always prided itself on putting advisers at the heart of everything it does which, is why they can expect to receive a personal and tailored service each time they do business with us. “But that’s not enough - we want to make the whole process as simple and streamlined as possible, and that’s what our Helping Hand campaign is all about. "Our survey showed 73% of those asked wanted guidance on underwriting criteria, while 60% needed support in marketing their business to the later life market. It’s clear we need to be doing all we can to make life easier for advisers.” The campaign will deliver tools to support advisers in everything from making the most of their own business, to understanding more about the product range as a whole. Head of customer propositions and experience, Laura Reid, thinks more needs to be done to help advisers unfamiliar with the later life market, she said: “The introduction of Retirement Interest Only mortgages in 2018 signalled a big shift in the later life lending market and one which requires lenders to step up and help advisers decipher which product suits their customer best.
“Hodge has always prided itself on putting advisers at the heart of everything it does"
“Historically Hodge has led the way in creating products to suit older borrowers, but where we’ve led others have followed, so we now have a situation where there are more options available but not enough education about which product suits who.”
In addition to the educational resources, we’re working hard to improve online services. Advisers are already able to apply for equity release products and to get a Decision in Principle online and use our affordability calculator.
Over the coming months we will be responding to the clear need for more education about the later life market with a series of guides, videos and info-graphics.
The year ahead will see more improvements to our digital services, all in response to broker feedback and always with the adviser’s needs in mind.
The Helping Hand campaign launches with a brand-new underwriting guide created with advisers in mind and designed to answer all the questions they might have before they get to the application stage.
LIFETIME MORTGAGE INSIGHT Issue no.10 April 2019
Have you heard about our new Income Lifetime Mortgage? Harold Pritchard, Distribution Director of Legal & General Home Finance
Legal & General’s Income Lifetime Mortgage provides customers with a regular monthly income over a fixed term to help them maintain the lifestyle they want in retirement. The new product aims to provide a lifetime mortgage solution for consumers who prefer a fixed monthly income to a lump sum. It could help those who haven’t been able to save as much into their pension as they would have liked, or their pension may not have lasted as long as they hoped. It’s therefore a compelling option for those wanting to bridge a retirement income gap, so that they can enjoy a more comfortable standard of living in later life. Like Legal & General’s Flexible Lifetime Mortgage range, interest on the mortgage will roll up over the life of the loan. The loan and interest will be repaid from the sale of their property upon the last surviving borrower’s death or a move into long-term care. However, with an Income Lifetime Mortgage the effect of compound interest is reduced as funds are released in monthly amounts, rather than lump sums. The product will be available to people aged 55 and over with a minimum property value of £100,000. Customers will be offered an interest rate that is fixed for life at the outset, while the monthly income from the mortgage will run for an agreed term of 10,15, 20 or 25 years and cannot be extended. At the end of the fixed term, the monthly income will stop and interest will continue to roll up until the mortgage is repaid. Consumers can choose to stop this income at any point, but once stopped the income cannot be restarted.
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Harold Pritchard, Distribution Director of Legal & General Home Finance said:
Our research shows there is a segment of older homeowners who want to use their housing equity in later life, but who also want the discipline of a regular income. “Whether it’s paying for a day out with the grandchildren or a weekend away in the country, we know how useful that little bit of extra income could be for so many people to keep them doing the things they love. Our income solution is a new option for these consumers, giving them the chance to enjoy the benefits of their housing wealth with a fixed interest rate for life, but with the security of a regular monthly income for up to 25 years. There is a bright future ahead for retirement lending and we want to see more people benefit from the positive role their homes can play in later life. More choice and more flexibility in how consumers access and use their housing wealth are key to that future and to leading more people into a better retirement. Interested in finding out more? Visit http://www.legalandgeneral.com/adviser/income LTM to read our case studies and new product information.
LIFETIME MORTGAGE INSIGHT Issue no.10 April 2019
Product flexibility and later life lending
By Jennafer Holt, Senior Marketing Executive at more 2 life
The face of retirement has changed drastically in recent years. Not only did the pension reforms of 2015 alter the way in which retirees use their pension funds, but other factors such as increasing debt, interest-only mortgages, and increasing care costs are impacting pension provision. Furthermore, older generations just think differently about retirement. A 2018 survey commissioned by Key Group showed that those of pension age now view retirement as a time of freedom, adventure, and a time to explore new possibilities, rather than the older concept of retirement as a time to kick back and relax. All of these factors combined means that retirement is now more unpredictable than ever before. Clients may unexpectedly need to supplement hefty care costs for themselves or their parents, they might suddenly decide that they want to go on a trip of a lifetime, their mortgage debt or unsecured debt might grow too large for them to deal with, or they might find that they have invested their pension funds unwisely. While equity release can and certainly does help retirees in all of the above situations, it is also essential that the products recommended to the client are capable of providing the flexibility needed in later life. Protecting for unpredictability A change in circumstances may mean that the client either has to or is able to repay their loan and being unable to do so, or being hit with a huge or unexpected exit penalty is far from helpful and can cause distress. This is of particular concern to older clients when a spouse or partner passes away or
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goes into long-term care, and the remaining client is left alone with an unmanageably large property. An article from The Telegraph in January 2019 states that 44% of equity release products would incur a penalty if the remaining client were to repay their loan in such a circumstance. Furthermore, the article also states that of those products with variable early repayment charges, 71% are based on gilt rates. With gilt based early repayment charges, clients could incur penalties anywhere up to 25% of the amount repaid. Our flexible features At more 2 life, 80% of our plans come with fixed early repayment charges - so if clients do have to or want to repay, any penalties incurred will always be of a known cost – and early repayment charge exemptions on downsizing (as long as such a move occurs at least 5 years after the loan completes). 60% of our plans also come with an ERC exemption for joint cases within 3 years of the death/admission into long-term care of the first borrower.
ad-hoc partial repayments are available on the majority of our plans, of up to 12% of the initial loan amount each year depending on the plan chosen. Inheritance protection is also available with most of our plans, meaning your clients can still leave an inheritance for their loved ones even if they do take equity release, depending on their plan and if they don’t take the full amount available to them.
At more 2 life, we understand the importance of empowering older customers, by bringing products to market which deliver the flexibility and control needed to deal with the wide range of needs posed by today’s retiree. As the equity release market continues to grow, it If a change of circumstances means a client is essential that the products introduced to is able and wants to repay some of their deal with increasing customer volumes are loan to reduce the impact of roll-up interest, also created with their varied needs in mind.
LIFETIME MORTGAGE INSIGHT Issue no.10 April 2019
Retirement Interest-only mortgages the legal process A year ago the Financial Conduct Authority approved the reintroduction of Retirement Interest-Only Mortgages ("RIOs") for those in later life. Today, the market is slowly starting to pick up pace, so what should you expect from a solicitor acting for your clients taking out one of these products? The FCA have not imposed any additional requirements on solicitors for dealing with a RIO. The only requirements solicitors are to comply with are those set out in the UK Finance Mortgage Lenders' Handbook, and these requirements are the same as for every other mortgage borrower. Is this sufficient? At Ashfords LLP, we think not. In a standard remortgage there is no requirement for detailed advice to be given to the borrower, or for them to sign the mortgage deed in the presence of a solicitor. This means, the borrower could receive no more than a letter saying "here is the mortgage deed to sign". In standard Remortgage cases, this would probably not cause any real issues, but would it when dealing with the older, more vulnerable market? We at Ashfords are experienced in dealing with those in later life and are alert to the substantial risks that could arise in the future. With this in mind, Ashfords LLP will always ensure a borrower taking out a RIO will receive detailed advice on the terms of the mortgage offer they are entering into. In addition, we will insist the borrower meets with a solicitor to sign the mortgage papers.
This will ensure that the borrower is fully aware of what they are entering into and offer some protection to both Ashfords, and financial advisors in the future should a claim that the borrower was not aware of the nature of the transaction be raised by a family member. Ashfords LLP can act in RIOs for a fee of ÂŁ774 (including VAT) and disbursements. We include the cost of meeting with a solicitor; either in one of our 6 offices, or one of our network of travelling solicitors at the borrower's home, within this fee.
The RIO team at Ashfords LLP is headed up by Kathy Cracknell, an Associate Solicitor. If you have any questions on how Ashfords LLP can assist you with clients entering into a RIO, please do not hesitate to contact Kathy on the details below. Kathy Cracknell Associate Solicitor for Ashfords LLP k.cracknell@ashfords.co.uk 01392 334048
LIFETIME MORTGAGE INSIGHT Issue no.10 April 2019
Just for you lifetime mortgage case study
By Nick Brown, Propositions Manager, Retirement Lending, Just Retirement
Tom and Anna Hill’s story Tom and Anna are 75 and 71 respectively and live in Leeds. They currently have an interest only mortgage and the term is about to expire. They’re not keen on downsizing or moving out of their area. Tom is still employed full time as a chef at a local restaurant while Anna is in part-time employment as a town planner at the local council. While Tom enjoys his job and wants to work for as long as his health permits, Anna wants to scale down her role with a view to retiring in five years’ time. Both have a modest lifestyle and enjoy eating out occasionally. They don’t have any real hobbies but enjoy spending time together at weekends with their eight grandchildren. “We’re comfortable at the moment and want this to continue into retirement even though we weren’t expecting this amount of mortgage debt at this time in our lives.” Lifetime mortgage required: Property worth £280,000 with £42,000 mortgage (so £238,000 in equity). Although equity release can be used to repay existing debt, it could cost more in the long term.
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How does the Just For You Lifetime Mortgage help them? Their mortgage repayment plans haven’t worked out well for them and they still owe £42,000. They’ve been able to service 100% of the interest while they’re both working but their concern was what happens when Anna retires. They didn’t feel able to commit to monthly payments indefinitely as Anna plans to retire in a few years. Ideally, they wanted the ability to stop paying interest at some point while maintaining the security of tenure.
The Just For You Lifetime Mortgage enabled them to: • Pay off their interest only mortgage • Benefit from a reduction to the standard roll-up rate while they’re servicing interest • Benefit from the flexibility of payment holidays • Service interest while they are still working and when they want to stop, for example when Anna retires, the loan will automatically switch to a roll-up and a higher interest rate.
All numbers are illustrative only to show how the Just For You Lifetime Mortgage could be used. This is not intended to provide any form of advice or recommendation.
For more information Call: 01737 233297 Email: support@wearejust.co.uk Or visit: justadviser.com Lines are open Monday to Friday, 8.30am to 5.30pm
LIFETIME MORTGAGE INSIGHT Issue no.10 April 2019
Events Calendar Whats On
2019 The Premier Equity Release Club now offer FREE 1-2-1 telephone tutorials at a time suited to you – call us on 01326 567970 to find out more.
Equity Release Council AGM
24th April
Eversheds London EC2V 7WS
Mortgage Expo
1st May
Leeds-The Royal Armouries LS10 1LT
Financial Services Expo
15th May
Manchester- Emirates Old Trafford
Financial Reporter Later Life
5th June
Southampton Football Club
Financial Reporter Later Life
6th June
Milton Keynes – Double Tree
Financial Reporter Later Life
12th June
Durham -Emirates Riverside Cricket
Financial Reporter Later Life
13th June
Barnsley TBA
Financial Services Expo
13th September
London Old Billingsgate Walk
Financial Reporter Later Life
2nd October
Bath- Racecourse
Financial Reporter Later Life
3rd October
Derby Club DCFC
Financial Reporter Later Life
9th October
Watford TBA
Financial Reporter Later Life
10th October
Wrexham TBA
Mortgage Expo
16th October
London- Hall 2 Barbican
Mortgage Solutions Later life
22nd November
Royal Garden Hotel Kensington
LIFETIME MORTGAGE INSIGHT Issue no.10 April 2019
Learning Zone Inspired by Pure Retirement’s new Learning Zone on their Online Portal, we continue to include a new Learning Zone section in our magazines, highlighting the events and resources that are readily available to you, keeping you updated on this ever-growing market and helping you to build your business in equity release.
Reports & Webinars
Pure Spring Term Webinars
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See the latest features of our newly launched mobile app in our recent launch video
See all the features of our Digital Marketing Toolkit and find out how it can help you in our explainer video
View here
View here
LIFETIME MORTGAGE INSIGHT Issue no.10 April 2019
Upcoming Events
Q2 Events Manchester FSE, May 15th
Mortgage Solutions Supper Club, Bristol May 22nd/23rd
Finacial Reporter Later Life Lending Events 6th-13th June
In The News
Recent Headlines 43% of people won’t be able to afford retirement
Equity Release funds 46 first-time buyers a week
Two thirds of homeowners are opting to improve rather than move
Building
Business Your in Later Life Lending
Marketing Support
Pure Service Toolkit
Pure’s Marketing Team are on hand to help you reach your customers, with a whole range of bespoke materials for you to use with your existing clients, prospect clients and potential introducers Click here to find out more...
LIFETIME MORTGAGE INSIGHT Issue no.10 April 2019
Tax and benefit guide 2019/2020 Personal tax allowance Personal allowance
£12,500
Rent a room
£7,500
Dividend allowance
£2,000
Income tax rates for UK (excluding Scotland) Starting rate
0%
£0- £5,000
Basic Rate
20%
£0- £37,500
Higher Rate
40%
£37,500 - £150,000
Basic rate Div
7.5%
Over the £2,000 div allowance
Higher rate Div
32.5%
As above
Additional rate Div
38.1%
As above
Income tax is paid on the amount of taxable income remaining after allowances have been deducted.
Tax on residential property purchase £125,000
0%
In Scotland £145,000
£125,000- £250,000
2%
In Scotland £145,000- £250,000
£250,000- £925,000
5%
In Scotland £250,000-£325,000
£925,000-£1,500,000
10%
In Scotland £325,001-£750,000
Second and further properties over £40,000 – a supplement of 3% applicable on the whole purchase price.
Capital Gains Tax
Inheritance Tax
• Annual exemption is £12,000
• The nil rate band is £325,000 with 40% IHT normally payable above this threshold.
• Individuals flat rate of CGT that applies to gains in excess of the annual exemption is 10% up to higher rate. • Chargeable gains in excess of the higher rate threshold: 20% • £6,000 CGT exemption for trusts, 20% rate thereafter • Additional 8% for residential property.
• A lower rate of IHT (36%) applies if you leave 10% of your net assets to charity. • Residence nil band of £150,000 where a residence is passed on death to a direct descendant increases to £175,000 in 2020/2021 • The proportion of the threshold unused on the first death of husband or wife or civil) is effectively transferable to the surviving partner and serves to increase his or her threshold by a corresponding percentage. • Chargeable lifetime transfers and potentially exempt transfers attract taper
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relief, if made up to seven years before death on the amount of gift over the nil rate band. • Gifts that are IHT free as soon as death occurs: • Gifts between UK domiciled husband and wife or civil partners. • Total gifts up to £3,000 in a year (can carry forward 1 year) • Small gifts to others up to £250 per recipient per year. • Gifts in consideration marriage ranging from £5,000 from each parent of the couple to £1,000 for anyone else.
LIFETIME MORTGAGE INSIGHT Issue no.10 April 2019
Pension Age Benefits State Pension entitlement Flat rate, single pension of £168.60 per week is payable from 6th April 2019 (35 qualifying years of National Insurance contribution needed for a full rate) available to those reaching state pension age on or after 6th April 2016. For those who reached retirement age before 6 April 2016 the basic state pension of £129.20 (30 qualifying years needed for a full rate) plus any additional state pension. Claiming Retirement Pension – 4 months before qualifying age the pension service will send pack if not phone 0800 731 7898. An over view of changes to State Pension Age from April 2010 – Nov. 2018 Until April 2010 the State Pension Age or “retirement age” was 65 for men and 60 for women. From April 2010 – November 2018 pension age for women will gradually rise to 65; Women born before 5th April 1950, pension age is 60. Women born after 5th December 1953, pension age will be 65 or older. Women born between those dates, rises on a sliding scale between 60 and 65 depending on date of birth. Future changes for both men and women as pension age rises to 68 over period of time
The Savings Credit – is for those already in receipt of state pension age over 65 (couple at least one 65+) and is designed to reward savings and private/occupational pension provision. No longer available to new claimants. Single £144.38 Couple £229.67 – Savings credit maximum single £13.73 and couple £15.35. How to claim Pension Credit – Call the application line free on 0800 99 1234. Council Tax Support – means tested Those in receipt of state pension Low incomes, and having no more than £16,000 in savings assets can get help towards their council tax bills. For capital exceeding £10,000 for each £500 (or part) this is deemed as notional income of £100 per week which will reduce benefit. Lower ages then savings of no more than £6,000 and the calculation is very different. People on pension credit get help up to 100% but those working will get having to pay a set percentage towards the bill. It depends on: • where you live (as each council sets its own scheme) • your circumstances (for example, income, number of children) • if other adults live with you
Pension age 68 – may well be brought forward currently 2044 – 2046
Because each English and Welsh local authority now has its own scheme there are differences between them. You can find links to all local authority schemes and local help and advice at http://counciltaxhelp.net/.
Pension age 69 – from the late 2040 For more information – Retirement Pension age calculator on www.gov.uk for both State Pension and Pension Credit & bus pass.
Also, the benefit calculator at www.turn2us.org.uk uses the local scheme applicable to you if you provide it with the name of your local authority or your postcode.
Pension age 66 – October 2020 Pension age 67 – expected 2026 – 2028
Pension Credit – means tested – Pension Credit has two parts: The Guarantee Credit – falls in line with state pension ages.
In Scotland the government has sought to protect claimants from the UK-wide 10% drop in funding by making up the difference. Hence, a single system replicates the old Council Tax Benefit scheme.
Single minimum income of £167.25 per week. Couples minimum income of £255.25 per week.
Council Tax Support enquiries – Contact your local authority.
Additional Severe Disability £ 65.85 per week. Carer’s addition £36.85 per week.
• Attendance Allowance
There is no capital limit, but there is an assumed (“deemed”) income of £1 per week for every £500 of savings over £10,000.
Other benefits possibly in later life • Carer’s Allowance • Disability Living Allowance-being replaced by Personal Independence payment • Personal Independence Payment
Attendance Allowance (AA) If you are 65 or over and have care needs. It is payable at two different rates: Higher rate £87.65 Lower rate £58.70 How to claim AA – www.gov.uk or Helpline on 0345 605 6055 Carer’s Allowance – Means tested If you look after someone who gets DLA / PIP or attendance may be entitled. To qualify must provide at least 35 hours care per week and, if you work, your net earnings need to be less than £120 per week. Carer’s Allowance is £66.15. Adult dependant £38.90. Warning – If claiming severe disability then it may affect further benefits. How to claim Carer’s Allowance – Claim online at www.gov.uk or phone the Carer’s Allowance Unit on 0345 608 4321 Disability Living Allowance Disability Living Allowance (DLA) is money for people who have extra care needs or mobility needs (difficulty getting around) as a result of a disability. If you are 16+, you can no longer make a new claim for DLA. You may be able to claim Personal Independence Payment (PIP) instead Higher £87.65 Middle £58.70 Lower £23.20 Mobility Higher £61.20 Mobility lower £23.20 Personal Independence Payment (PIP) replacing disability living allowance (non contributions) PIP is a benefit for those aged 16 to 64 with a long term physical or mental health condition or disability. Daily living component: Mobility Component Standard rate – £58.70
£23.20
Enhanced rate – £87.65
£61.20
For more information www.disabilityrightsuk.org. or Helpline on 0345 850 3322. This is not an exhausted list of benefits, for those to attain state pension age others will apply. PERC hold no responsibility for this data. It is you and your clients responsibility to check all tax and benefits with appropriate departments and local offices.
LIFETIME MORTGAGE INSIGHT Issue no.10 April 2019
Rate changes from Jan 2019 - AER Lender
Product
Lowest Rate
Aviva
Flexi Lump
Please note that each Aviva case is individually assessed.
Canada Life
New Capital – lite 4 levels Capital Platinum Interest Platinum Voluntary Platinum Lifestyle – lite 5 levels Lifestyle Voluntary
3.86%-5.55% 5.55% 5.99% 6.29% 4.09%-6.79% 6.16% 6.36%
3.86%-5.55% 5.55% 5.99% 6.29% 4.09%-6.79% 6.44% 6.64%
3.86%-5.55% 5.55% 5.99% 6.29% 4.09%-6.79% 6.16% 6.36%
Hodge
Lump sum Flexible
4.09% 4.21%
4.24% 4.44%
4.09% down 4.21% down
Just Retirement
J1 J2-J4 J5-enhanced
5.24% 4.70% 6.05%
5.29% 5.10% 6.10%
5.24% down 4.70% down 6.05% down
Legal & General
Pink Yellow Blue Indigo Premier Range
3.55% 3.84% 4.65% 5.58% 3.45%
4.13% 4.39% 4.95% 5.74% 3.98%
3.55% down 3.84% down 4.65% down 5.58% down 3.45% down
LV=
Flex Lump Sum
6.04% 3.7%-4.51%
6.04% 3.85%-4.51%
6.04% 3.70%-4.51%
More2life
Tailored Enhanced Capital Choice Capital Choice PLUS Maximum Choice Lump Sum Maximum Draw Down
from 6.33% 4.44% 4.75% 5.60% 6.01%
6.33% 4.61% 5.01% 5.60% 5.80%
from 6.33% 4.44% down 4.75% down 5.60% 6.01% up
Onefamily
Interest / Vol Lite CPI Interest / Vol Lite Fixed Interest / Vol Standard CPI Interest / Vol Standard Fixed New – Super LTV
4.80% 4.43% 5.22% 4.90% 6.37%
5.43% 5.30% 5.85% 5.80% 6.37%
4.80% 4.43% 5.22% 4.90% 6.37% new
Pure Retirement
Max 1 Max 2 Max 3 - Cashback option 2.5% Sovereign – 5 levels
4.89% 4.74% 5.04% 3.90%
5.78% 5.63% 5.93% 6.92%
4.89% down 4.74% down 5.04% down 3.90%-6.92%
BTL & Seconds
cheaper if £599 Arr/fee
inc 2nd homes
New - pay val New - pay val
Highest Rate
Current Rate AER
Correct at 26th March 2019
Correct at 28/11/2018. Please always check lenders rates and commissions as this can change without notice.
20
LIFETIME MORTGAGE INSIGHT Issue no.10 April 2019
Contact details and extra services Lenders
Solicitors
PI Cover
Aviva www.aviva-for-advisers.co.uk 0800 015 4909
Marketing deals available if using panel solicitors and lenders £50
The PI Desk market leading with 18 years experience in FS Call Jane 01326 567970
Canada Life www.canadalife.co.uk 0800 068 0212
Ashfords 01392 334060 £495 + VAT + if home visit £100 + VAT + disbursements for club members
Crown 0208 875 5665 Mark King
Ashfords London Premier Service £750 + VAT + disbursements for quicker turnaround by 5-10 working days
Sourcing
Hodge Lifetime www.hodgeforintermediaries.co.uk 0800 731 4076
Gilroy Steel 01604 620890 www.gilroysteel.co.uk £595 + VAT for club members
Iress- free www.thepremierequityreleaseclub.co.uk Registration on home page left scroll down
Just Retirement www.justadviser.com 0845 302 2287
Poyntons Law 01625 837937 www.poyntonlaw.co.uk £595 + VAT and Dis for club, inc home visit by sols
Benefit software
Legal & General www.landghomefinance.com 03330 048 444
Freeben www.freeben.co.uk 30 day free trail and £40.50 per annum with 10% discount per annum for club members
LV= www.lvadviser.com 0800 028 8974
WEB services
More2life www.more2life.co.uk 08454 150 151
Marketing deals available if using panel solicitors and lenders £50
Website for IFA made to measure from £145 for 12 months. From Freeben, call Jane 01326 567970
Onefamily www.onefamilyadviser.com 0800 802 1645 Pure Retirement www.pureretirement.co.uk 0800 0818 281
Equity Release Council www.equityreleasecouncil.com 0844 669 7085
Retirement
Please note any information in this magazine is for registered intermediaries and NOT to be issued to members of the public.