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Equity Release Supermarket News Reviving Time-Honoured Wisdom: Equity Release and New Year Financial Planning
Reviving Time-Honoured Wisdom: Equity Release and New Year Financial Planning
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Equity Release Supermarket News Reviving Time-Honoured Wisdom: Equity Release and New Year Financial Planning

Reviving Time-Honoured Wisdom: Equity Release and New Year Financial Planning

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Peter Sharkey
Checked for accuracy and updated on 27 January 2025

You hear them much less frequently nowadays than you once did perhaps thirty or forty years ago, because the sad truth is a disappointingly large number of traditional, useful and helpful sayings and observations have been steadily sidelined in recent decades.

These long established maxims encapsulate decades, if not centuries, of native wisdom and experience, delivered in short form in order that they may be understood by the widest possible audience.

Not surprisingly, Shakespeare has been the most prolific source of astute aphorisms subsequently absorbed into the English language. It’s estimated that the Bard was responsible for the introduction of more than 1,700 words and phrases, from “…you must be cruel to be kind,” (Hamlet), to “…all that glistens is not gold,” (Merchant of Venice). He changed nouns into verbs and verbs into adjectives in addition to compounding hundreds of new words and adjectives.

As we cautiously negotiate the opening days of the new year, a number of frequently used phrases are resurrected and proffered like a well-meaning guiding hand for our as yet unfulfilled ambitions, a written form of help for those of us endeavouring to adhere to either one, or a series of resolutions.

Most Baby Boomers will be familiar with these sage adages: “A bird in the hand is worth two in the bush,” or “Don’t count your chickens until they’re hatched”, for example, are each underscored by a wonderfully logical financial message.

It follows that setting aside time at the end of December or early January to draw up plans for the forthcoming 12 months tends to be a task undertaken primarily by the nation’s grey-haired demographic. I think this is because this cohort inherently understand the benefits of establishing new targets.

Like many people, your correspondent does, occasionally, ‘fall off the wagon’ around this time of the year, although I’m not referring to alcohol (TBH, I'd had plenty even before new year’s eve arrived), but to those tempting, attractively packaged goodies yearning for attention. I’m referring, of course, to the residual mince pies untouched in the breadbin, hidden away like edible wallflowers. Who can resist having one with a mid-afternoon cuppa? Despite their appeal, I’ll be glad when they’re gone.

In addition to the seasonal affliction which manifests itself when we’re faced with difficult-to-resist treats, the first part of January is a time when we can also appreciate those financially-related phrases that have stood the test of time. “Waste not, want not,” is a saying many Boomers will recall hearing from their grandparents, most of whom endured the privations of World War II, while “Look after the pennies and the pounds will look after themselves,” feels particularly apt for those attempting to create a bespoke financial plan at any time.

Indeed, given the state of the economy, the increasing likelihood of more personal tax hikes, jittery business confidence and the dark, looming spectre of inflation, millions of people understand that the time for serious belt-tightening has arrived. Under the circumstances, looking after the pennies is not only recommended, it’s absolutely essential.

Similar sentiments have been expressed during the festive season by a sizeable number of personal finance commentators prepared to dispense their wisdom in national newspapers and magazines, as well as online, with the express intention of guiding people in the right direction. Living in uncertain times can be disquieting, particularly for people with unsettled debts or outstanding interest-only mortgages; for many, such guidance is especially welcome.

Moreover, it’s increasingly noticeable that commentators, advisers and financial industry observers readily acknowledge the role equity release can play in longer-term financial planning, whether as part of a new year resolution or a much lengthier plan stretching for perhaps 5-10 years.

This begs the question: “When is the right time to release equity from my property? In truth, the answer depends upon a number of factors, not least personal circumstances.

For instance, perhaps conscious that paying off an interest-only mortgage would effectively free-up more disposable income is a great motivator for many people to research the equity release process, particularly if they do not currently have the means of repaying the mortgage when it matures.

Similarly, during the 16-year period of extremely low interest rates millions of people accumulated a multitude of debt, particularly the credit card variety, and now find themselves saddled with mountains of unaffordable liabilities. Equity release is not some form of magic wand which makes this debt disappear altogether – after all, the process of accessing the wealth built up in your home involves a mortgage commitment – but in almost all cases, there is no legal obligation to make monthly payments on what is called a ‘lifetime mortgage’, which could be used to remove tormenting debt.

One of the most popular reasons for releasing equity from the home is to pay for improvements which, upon completion, usually enhance the property’s value. This could be anything from a new kitchen, or an extension, but the equity release funds, which are tax-free, can also be used to make a property ‘age-proof’, ie more comfortable for older owners who may require external hand rails or newly-built slopes to replace small flights of internal steps.

As you may imagine, at this time of the year, when we’re experiencing our annual (prolonged) spell of cold, foggy, wet weather, releasing funds from the family home often proves popular with older property owners who understandably wish to embark upon a longer-term holiday in sunnier climes. This could take the form of a long, luxurious cruise, or an extended trip Down Under for the Ashes series which begins in November.

Irrespective of the reasons why you may be considering equity release, in the first instance there is great merit in speaking with a qualified adviser who can outline the pros and cons (yes, there’s a list of both) and help you decide if it’s for you.

As many of us move tentatively towards establishing our new year resolutions, there’s one saying I came across several years ago which reminds us that whatever we do, the one thing we should avoid is sitting on our hands. The German philosopher Goethe wrote, “Whatever you can do, or dream you can do, begin it. Boldness has a genius, power and magic in it.”


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