Your Questions: Would equity release help make our assets work for us in old age?

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Charlie Weston

Question: We are a married couple in our late 50s, both employed in the civil service and hoping to retire in the next couple of years. We own our home in Kildare and have a modest holiday home in Portugal, where we hope to spend more time when retired. We need to think about making a will, but as we have no children, it is unclear what our final instructions would be. There are lots of nieces, nephews, friends, etc, but rather than leave our homes between them - which sounds far too complicated - we would rather find some way of making our assets work for us in our retirement to give us more financial security. We had heard of "equity release" schemes, but are not sure if they are still available, or some form of "home reversion arrangement" whereby a bank would essentially buy our main residence for less than the market value, but in turn we could live there for the remainder of our days. Healthcare costs need to be factored in, as one never knows what older life has in store. Down the road, one of us may need nursing home care. We would appreciate any advice or guidance around this.

Answer: Equity release schemes are currently not available in Ireland. However, they may well be in the coming months, with previous provider Seniors Money signalling it plans to return to the market earlier this year, according to Joey Sheahan of MyLifeCover.ie. This came on the back of a move by the Central Bank this year to alter its mortgage lending rules to allow the return of equity release lending. However, the Seniors Money website says it has no confirmed date for new business, so you may have to wait. In terms of your retirement years, generally speaking, workers in the public sector, depending on their length of service, have relatively good financial provisions for retirement. But given your property assets, it is certainly astute to look into making these assets work for you when you can enjoy them, Mr Sheahan says. In the absence of an equity release option, you could consider letting rooms in your properties while you are home and/or away. With your Irish property, you may be able to do this tax-efficiently by applying for the rent-a-room scheme, through which you can receive up to €14,000 tax-free annually. The rental income could be used to supplement home insurance premiums, any renovations needed on the properties, and perhaps other regular outgoings such as health insurance, motor tax, etc. Regarding your will, you could consider nominating an executor who you could instruct to dispose of the two properties following the demise of the second spouse and then to disperse the net proceeds of sale among your nephews and nieces, etc.