FAQs

Please find a selection of frequently asked questions below. If you need any further information please contact us.

The Retirement Account

Your finances are going to play a substantial role in your retirement. That’s why we insist that – if you haven’t done so already – you enlist a skilled and objective financial adviser to take a good look at your circumstances and long-term expectations. A financial adviser will assess which opportunities would serve you best, before committing to one (even if it means we may not be the right provider for you).

If you don’t have an adviser, it’s easy to find one. Visit www.pensionwise.gov.uk

You can also visit Pick a Retirement Specialist, www.pick-a.org a directory of organisations that can help you as you approach retirement. Here you’ll find the type of support you need to help you prepare for your retirement financially.

The Retirement Account is a registered pension scheme established under income drawdown regulations. It has been designed to provide you with considerable flexibility and choice over how you manage pension investments and benefits over the span of your retirement.

The Retirement Account enables you to access your retirement benefits, normally from age 55. You can immediately receive a tax-free lump sum of up to 25% of your pension fund and you have complete freedom to do what you want with the rest, for example:

Leave your money invested in Pension Drawdown to provide:

  • An opportunity for investment growth
  • An income
  • Lump sum payments as and when you need the money

Purchase a Guaranteed Annuity to provide a secure lifetime income (you decide how much, if any, of your money you use this way)

Or you can have a mixture of Pension Drawdown and a Guaranteed Annuity.

The Retirement Account gives you the flexibility of dividing your funds between Guaranteed Annuity and Pension Drawdown. This means you can balance the security of a Guaranteed Annuity with the opportunity and access of Pension Drawdown. You can also adjust how much income you receive and how much income tax you pay.

You may find a Guaranteed Annuity is a sensible way of covering your fixed day to day living expenses in retirement, alongside the state pension scheme and any other pensions you may have. Pension Drawdown funds can be invested for growth opportunities or for additional spending in the early years of your retirement when you are most likely to be active.

With Pension Drawdown you can take as little or as much of your money as you want while it remains invested. So you can take no money out initially and just leave your funds invested, or you can take a regular income and/or just withdraw money from your fund when you want.

You have the choice of investing in one or more of our thoroughly researched range of funds. Each fund comes with a different risk profile, which means, with the help of your financial adviser, you can match your choice to the amount of risk you feel comfortable taking. If your fund choice changes over time you can switch between the different funds at any time.

The funds are invested in a range of different types of assets and are made up of units, which you buy. The price of these units depends directly on the performance and value of the investments in the fund. We work out the value of your investment in each unit-linked fund based on the total number of units you have in the fund and the unit price (the price at which we buy and sell units). If the unit price rises or falls, so will the value of your Pension Drawdown funds.

What options and choices do I have for Pension Drawdown?

As Pension Drawdown gives you complete access to your money, the main choices you have are to do with the funds that you want to invest in. Details of the range of funds available can be found in the Investment Fund Summary booklet.

In the event of your death, any remaining Pension Drawdown funds will be made available to your beneficiary(ies), after the payment of any outstanding plan charges and adviser fees, and the recovery of any overpaid income.

The Retirement Account is structured so that you can buy more Guaranteed Annuity whenever you want using any Pension Drawdown funds you have. Moreover, you can choose different options including different dependants for each purchase.

The amount of income you get will also depend on how much money you allocate to the Guaranteed Annuity, your age, lifestyle, state of health and other factors including annuity rates at the time of purchase.

You can choose to have your Guaranteed Annuity and Pension Drawdown income paid to you monthly, quarterly or yearly. You can choose to have your payments made to you on the 12th, 20th or 28th of the month, although you may receive your payments earlier than your chosen date. For example if your payment falls over a weekend or bank holiday.

If you have chosen not to include death benefits under your Guaranteed Annuity and you have no Pension Drawdown fund then your Account will cease.

Any Dependant’s Income you have chosen to include under a Guaranteed Annuity will be payable to the spouse, partner or other dependant named in your policy document. This person will also receive the balance of any Income Guarantee payments.

Where you have opted for both an Income Guarantee and a Dependant’s Income, the income payable for any residual Income Guarantee period is the level of income you would have received, had it continued for the remainder of the Income Guarantee period. When the Income Guarantee period ends, the income from that point will be the level of the chosen Dependant’s Income.

Where you have opted for both a Money Back Guarantee and a Dependant’s Income, a lump sum may be payable on the second of your death and the dependant’s death. The lump sum will be your chosen Money Back Guarantee percentage, multiplied by the original purchase price, less the total gross income payments, including any Dependant’s Income, to date.

For lump sum payments including:

  • Money Back Guarantee
  • Remaining Pension Drawdown funds

Retirement Advantage has discretion over the exact form of benefits and the recipients. You can let us know who you would like to receive benefits following your death by instructing us in writing. Any nomination you make this way is not binding on us at the time but will be considered carefully.

The beneficiaries will have three options:

  • Establish their own Retirement Account, leave the money invested and draw an income as and when they wish
  • Purchase a Guaranteed Annuity
  • Take the remaining value of the Account as a lump sum

If your beneficiaries would prefer to take an income instead of a lump sum we will set up their own Retirement Account for this purpose. We will make this option available to them at the appropriate time, provided there is a minimum value left in Pension Drawdown Funds (the current minimum value can be found on our website). Otherwise any remaining funds will be paid to them as a lump sum.

When we receive formal notification of your death, payment of any adviser charges from your Account will stop. Any outstanding payments that are due to your financial adviser may still need to be settled. Your personal representatives will be able to authorise a one off adviser charge to be paid from your Account by writing to us.

If you die on or after age 75 any lump sum payments can be distributed to your beneficiaries as a series of payments as opposed to a single lump sum. This could be useful as the payments are liable to income tax in the hands of your beneficiaries and by structuring payments in this way it could minimise the amount of tax they pay.

Tax on income

If you take an income from your Account though a Guaranteed Annuity and/or from your Pension Drawdown you will normally pay tax in the same way as you pay tax on earned income, through the PAYE system. This would also apply to any lump sum payments you decide to take from your Pension Drawdown fund.

Tax on Death

If you die before your 75th birthday any death benefits you have chosen under a Guaranteed Annuity Dependant’s Income, Money Back Guarantee or Income Guarantee, plus any Pension Drawdown funds will be tax free when paid to your beneficiaries. If you die from age 75 onwards then income payments made to your beneficiary(ies) will be taxed at their marginal rate of income tax while lump sums will be taxed at 45%. This tax rate will change to the beneficiary’s own marginal rate of tax with effect from 2016/17. There is normally no inheritance tax payable on the value of your Account.

Lifetime Allowance

HMRC sets out a limit for the total amount of pension benefits you can take called the Lifetime Allowance (LTA). A check is made to ensure that your benefits do not exceed the LTA at the commencement of your Account and when you reach age 75. If you exceed it you will have to pay a tax charge on the excess over the LTA limit.

Please also note

Tax rules depend on individual circumstances and may change. We recommend you get professional advice if you need more information on tax.

Redirection of Guaranteed Annuity payments into Pension Drawdown

At any time you can ask for all or a proportion of your Guaranteed Annuity payments to be paid into your Pension Drawdown fund instead of being paid to you. If you do this, at that point, you will not be liable for income tax on the payments and the gross amount would instead be available to buy units in your chosen funds. This could be a useful tool for planning how much tax you pay and it also means that you accumulate a larger Pension Drawdown fund which you can withdraw in the future or leave to your beneficiaries.

You can transfer your Pension Drawdown funds to another pension provider at any time. If you decide to transfer these funds, we may take a charge that will include any outstanding adviser charges. You can’t transfer the value of any Guaranteed Annuity.

We will send you a yearly statement to show you how your Account is doing. You should review your Account on a regular basis to ensure it continues to meet your needs. Your financial adviser can help you with this. You can check the prices of the funds you are invested in online. You can find out your Account value by phoning our customer services helpline. Our contact details can be found in the ‘About us’ section.

All of the charges outlined below are detailed in your personal illustration.

Adviser Fees

Adviser fees are charges for the financial advice you have received. You can pay for the advice by agreeing to have it deducted from the fund we receive from the transferring scheme(s). This will reduce the amount available to buy benefits in your Account.

If you are investing in Pension Drawdown you may also agree a regular ongoing fee and there may be other ‘one-off’ fees that you’ll need to agree with your adviser. These fees will be paid for by deductions from your Pension Drawdown account which will affect the value of the fund in the future.

Product Charges

There is an initial charge for establishing your Retirement Account. This charge is deducted from the fund we receive from the transferring scheme(s), and will reduce the amount available to buy benefits in your Account.

If you are investing in Pension Drawdown there is also an annual charge, which is deducted monthly and is taken from the Pension Drawdown part of your Account.

Both charges are outlined in your personal illustration and The Retirement Account Technical Summary. We may change our charges in line with the policy terms and conditions and will let you know before we do.

Annual Fund Management Charge (AMC)

There are different annual management charges depending on the fund(s) you choose for investment. These charges are reflected in the unit prices of each fund. Additional expenses over and above the AMC may be charged to the funds that you have invested in, to cover the costs incurred by the investment management company, and are deducted from the value of the fund. The level of these expenses is not within Retirement Advantage’s control, and may vary from year to year. The annual management charges for your chosen funds are shown in your personal illustration and our document ‘Retirement Account Technical Summary’ found on our website.

You have the right to cancel within 30 days of your contract being set up. We will write to you and provide a notice about your right to cancel. You need only return this cancellation notice if you wish to cancel your Retirement Account.

If you decide to cancel your Retirement Account, you must return the cancellation notice within 30 days. You must also return any money received, including any tax-free cash payments. Cancellation notices must be returned to:

Retirement Advantage
Customer Services
PO Box 4993
Worthing
BN99 4AE

A Guaranteed Annuity will provide you with a secure income for the rest of your life. You can also choose for this income to be paid to your spouse, partner or dependant upon your death.

You can buy a Guaranteed Annuity using the funds in your Account at any time, which could be at outset or later on in your retirement. At any time you can also increase your Guaranteed Annuity by purchasing additional amounts with any remaining Pension Drawdown funds you have.

The income you receive will depend on how much money you allocate to the Guaranteed Annuity. It also depends on your age, lifestyle, state of health and other factors including annuity rates at the time, and any optional benefits you choose.

What options and choices do I have for a Guaranteed Annuity?

Money back guarantee - you can choose to provide a lump sum in the event of your death. The amount payable can be up to 100% of the amount you originally used to purchase your Guaranteed Annuity, less all the Guaranteed Annuity payments made to you up to the date of your death.

Income Guarantee - you can choose to guarantee your annuity payments for up to 30 years. This means in the event of your death the income continues to be paid for the remainder of the guarantee period. At the point there is a claim for this benefit, your beneficiary(ies) can choose to exchange outstanding Income Guarantee instalments for a lump sum which we calculate at that time. You can’t choose an Income Guarantee and a Money Back Guarantee together.

Dependant’s Income - you can ensure that a dependant (spouse, partner or other dependant) receives a proportion of your income for the rest of their life should you die before them. The amount paid could be up to 100% of your income. Should you outlive your dependant, income will cease on your death.

Pension increases - to help protect your income against inflation you can choose to increase your income payments each year. Increases can either be a fixed amount of up to 10% each year, or linked to the Retail Prices Index (RPI).

How are these benefits paid for?

These options are paid for by a reduction in the Guaranteed Annuity income we offer you.

Is there an overall maximum purchase amount of annuity I can buy from Retirement Advantage?

The current maximum amount is £3 million, which may change in the future. The maximum amount applies to all guaranteed annuities (purchased within The Retirement Account or standalone Guaranteed Annuity) you have bought with Retirement Advantage and/or MGM Advantage. 

Am I eligible for The Retirement Account?

To qualify for The Retirement Account you must be at least 55 and no older than 85 (there is no maximum if you choose the Pension Drawdown option only). You and your financial adviser may need to provide us with some information about your health and lifestyle as part of your application, or we can call you to collect the relevant information. We will then provide you with a personally tailored quote, to get you the highest level of guaranteed income.

What is the minimum amount I can invest?

To invest in the Retirement Account you need a minimum of £20,000 in pension funds after any tax-free cash has been paid to you (usually 25%). You must also be a resident in the UK when you apply, and when the policy starts.

For full details of The Retirement Account, and other important information, please refer to The Retirement Account Key Features booklet.

How do I get a valuation on my investment?

You can request a valuation over the phone, email or in writing. Please contact us here

How can I find out about fund performance?

Visit our Fund centre to see current fund prices, fund fact sheets showing recent performance and fund information, and information about our Fund Managers.

Annuities

How do I let you know my new address?

  • Please call 0800 032 7690 with your policy number.
  • Or write to us at our Worthing address

If we are unable to verify your new address on the phone, or if you write to us, we’ll need evidence of your change of address, such as:

  • An original, recent utility bill or services confirmation showing your name and new address, or
  • A solicitor’s letter confirming the new address.

How do I change my name on my policy?

Please call 0800 032 7690 with your policy number.

If you would prefer to write to us instead, please send us a signed letter with your old and new signatures together with a certificate of marriage, civil partnership, deed poll certificate or decree absolute to our Worthing address

Why do I have to provide evidence for a change of name / address?

When you request changes to your personal details, we take various steps to verify that the information is being provided by you and not by an unauthorised person. We do this by using reference agencies to search sources of information relating to you. If this is unsuccessful we may need to ask for documentary evidence from you, for example, a utility bill for change of address.

How do I advise you of a bank account for my payment?

Please call us on 0800 032 7690 or write to us at our Worthing address.

When you request changes to your bank account, we take various steps to verify that the information is being provided by you and not by an unauthorised person. We do this by using reference agencies to search sources of information relating to you. If this is unsuccessful we may need to ask for documentary evidence from you, such as an original bank statement or letter from your bank showing the name and address of the account holder and the account number

How do I buy a Retirement Advantage product?

Your finances are going to pay a substantial role in your retirement. That’s why we insist that – if you haven’t done so already – you enlist a financial adviser to take a good look at your circumstances and long-term expectations.

If you don’t have an adviser, it’s easy to find one. Visit www.pensionwise.gov.uk

You can also visit Pick a Retirement Specialist, www.pick-a.org a directory of organisations that can help you as you approach retirement. Here you’ll find the type of support you need to help you prepare for your retirement financially.

Why has my annuity payment changed?

Your annuity may have changed for a couple of reasons. You may have set up your annuity with an escalation option; this would mean your annuity payments would increase each year on the basis you selected.

The other reason your annuity payment may have changed is because we’ve been given a new tax code by HMRC. As your annuity is taxed at source this may increase / decrease the tax you’re liable to pay. For confirmation of this, please call us on 0800 032 7690.

When will I receive my payment and can this date be changed?

Your payment is determined by your policy start date and the frequency you selected. Once you annuity has started, you won’t be able to make any changes to your payment frequency and benefits.

Will tax be deducted from my annuity?

Your annuity is taxed as earned income based on your individual tax code under the PAYE system. When HMRC gives us your tax code, we’ll make any adjustment required. We’ll send any tax due to the HMRC on your behalf.

When will I receive my pension commencement lump sum (also known as ‘tax-free cash’) payment?

If Retirement Advantage is paying your pension commencement lump sum, we’ll make payment within 48 hours of receiving your fund. This is paid by direct credit into your account and will be cleared funds within three to five working days.

Am I covered by the Financial Services Compensation Scheme (FSCS)?

Retirement Advantage is covered by the FSCS. You may be entitled to compensation from the scheme if we can’t meet our obligations. This depends on the type of business and the circumstance of the claim.

To contact the FCSC please visit www.fscs.org.uk/contact-us/

Is there an overall maximum purchase amount of annuity I can buy from Retirement Advantage?

The current maximum amount is £3 million, which may change in the future. The maximum amount applies to all guaranteed annuities (standalone Guaranteed Annuity or purchased within the Retirement Account) you bought with Retirement Advantage and/or MGM Advantage. 

How do I get a valuation on my investment?

You can request a valuation over the phone, email or in writing. Please contact us here

How can I find out about fund performance?

Visit our Fund centre to see current fund prices, fund fact sheets showing recent performance and fund information, and information about our Fund Managers.

Do I have to wait three years to conduct an income review on my Flexible Income Annuity?

You can ask us to change your income level or required fund performance at any time -please contact us here. We will automatically review your income on every third anniversary.

Equity Release

Will I leave a debt for my beneficiaries when I die?

No.

Retirement Advantage offers a No Negative Equity guarantee. This means that when your property is sold for the best price reasonably obtainable, if the proceeds after solicitors' and estate agents' fees are not enough to pay the amount owed to Retirement Advantage, we will not ask you or your beneficiaries to pay the shortfall. 

A lifetime mortgage may however affect the inheritance you’re able to leave your family, so we encourage you to talk to your family at every stage of the process. If leaving an inheritance is important to you, your financial adviser will bear this in mind when recommending a product to you.

Will my property be repossessed?

As long as you abide by the Terms and Conditions of the loan, you’ll always retain ownership of your home. You can stay in your home until your death or move into long-term care without the concern of your property being repossessed. 

If you have an Interest Select mortgage and can no longer afford the monthly payments, your loan will be converted to interest roll-up and you will not face repossession.

What happens if my circumstances change?

You must advise us if your circumstances change, for example if you get married, as they may affect your contract with us.

Do I have to pay tax on the money I receive?

Under current legislation, any cash sum drawn from your home will not attract Income Tax or Capital Gains Tax.

Will the money I receive affect my state benefits?

This is something your financial adviser will be able to tell you.

If you're receiving benefits, a lifetime mortgage may reduce or even cancel your entitlement to some means tested state benefits. If you’re not claiming any state benefits, you may be entitled to claim them.

Further information can be found from the Citizens Advice Bureau, HM Revenue & Customs, the Pension Service or the Benefits Agency.

Does my eligibility depend on my income and/or health? Will I need to take a medical?

Neither your income nor your state of health has any bearing on your eligibility for a Retirement Advantage lifetime mortgage. However, it may affect the product which is recommended to you. Your financial adviser will consider this when deciding on the product that is most suitable for you.

We've briefly outlined what you can expect when you take out a lifetime mortgage here. Or you can look at some of the questions and answers below.

What is a KFI?

KFI stands for Key Facts Illustration. It’s a document containing certain information about the lifetime mortgage you’re about to take out. It includes a description of your mortgage, alongside the features, benefits, risks, how much you’ll owe, fees and costs. It’s presented in a standard format so that you can easily compare it between different lenders and products. This format is defined by the Financial Conduct Authority.  

How long will it take to get my money?

Once your application has been submitted, a Valuer will contact you to arrange an appointment. Once this has taken place, an Offer Letter will be issued to you. In general, this takes around 2 weeks, but it can be quicker. Your solicitors will receive a copy of the Offer Letter, and will start the legal process. The legal stage is generally what takes the longest amount of time, as all of the necessary checks and searches need to take place. This can take between 4 and 6 weeks, but can sometimes take longer if a case is complex (for example, if the property is unregistered).

Can I come back for additional borrowing?

You may qualify for additional borrowing if there is sufficient equity remaining in your property. If you believe that this is the case, you’ll need to obtain financial advice and your adviser will be able to guide you through the process. We may require an up to date valuation of your property as part of the process. 

How do I know how much is outstanding on my lifetime mortgage?

You will receive an Annual Statement at the beginning of each year which will show your balance.

How is my lifetime mortgage paid off?

Usually, a lifetime mortgage is paid off following your death or move into long term care (or in the case of joint borrowers, when the survivor dies or moves into long term care). Repayment is due within one year of this, and the funds are usually raised through the sale of the property.

What if I want to repay early?

You can repay part, or all, of your lifetime mortgage at any time. However, our lifetime mortgages are designed to last for the rest of your life so an early repayment charge (ERC) may be payable. Your financial adviser should have explained when these would be applicable. It’s also explained in your KFI.

What happens to my home when I die or move into long term care?

When you die or move into long term care, your executors must get in touch with us. They’ll be responsible for selling your property and will have 12 months to repay the loan. Interest will continue to be charged until the loan is repaid.

What do you mean by long term care? 

Long term care means that you’ve chosen to leave your home because you’re no longer able to carry out two or more Activities of Daily Living (ADL) without the assistance of another person, or because you’ve become cognitively impaired (a loss of mental ability). When you leave the property, you can choose to go into professional care or move in with your family.

I've decided I want to move house, what do I need to do?

Once you've found the property you'd like to purchase, you should contact our Customer Services team. They'll talk you through the next steps, and send you an Application Form.

How will I know if the property I'd like to buy is acceptable to Retirement Advantage?

When you fill in the Application Form you’ll be asked about the property. If you tick a grey box you'll be prompted to contact our Underwriting team, who’ll be able to tell you if the property is acceptable.

What do Retirement Advantage need?

When you contact us we'll need you to tell us the asking price of your current property, and the purchase price of the new property. Our Finance Team will then calculate if you need to repay any of the mortgage when you port.

Will I need legal advice?

Yes, you’ll need to seek legal advice. The Solicitor you appoint when you purchase your new home may be able to act for you.

Will I need financial advice?

If you're moving your mortgage and not changing the outstanding loan amount, you won't need financial advice. However, if you'd like to take any additional borrowing you’ll need financial advice - this is explained in more detail below.

Will I need to repay any money?

If your new property is of lower value than your current one, you may need to repay some of your mortgage. This is because we need to keep the same level of borrowing as you initially took out. Our Finance Team will advise you if this is the case. We won't add any early repayment charges if you do need to make a repayment.

Can I borrow any more money?

If you did not initially take out the maximum amount available to you, or are moving to a higher value property, you may be able to request additional borrowing. This is subject to our lending criteria at the time. Our Finance Team will be able to let you know whether this option is available to you. If it is, you’ll need to seek financial advice.

What fees will you charge?

We'll need to instruct a valuation, and will let you know how much this costs when you apply. A completion fee will also be charged when the Offer is sent to you. Both of these should be paid by cheque up front. You’ll also need to pay for your legal advice, and any fees charged by your financial adviser.

Will I need to pay an Early Repayment Charge (ERC)?

No, we don't charge ERCs if you’re moving the mortgage to another property.

What's the process?

Once we receive your completed application form, we'll instruct a valuer. They’ll contact the estate agent managing the new property, and arrange a valuation.

Once this has taken place, an Offer Letter will be sent to you confirming details of the port, including the amount you need to repay, if any. In general, this takes around 2 weeks, but it can be quicker.

We'll also send a copy of the Offer Letter to your solicitors, who’ll start the legal process. The legal stage is generally what takes the longest amount of time and can take between 4- 6 weeks (although it can sometimes take longer if a case is complex).

Will the property purchase and the port complete at the same time?

Yes. We'll liaise with your Solicitors to ensure everything completes on the same day.

We understand that a bereavement can be very difficult. We try to make the process of informing Retirement Advantage as simple as possible. 

If you're notifying us about the death of one person, but a second person is also named on the mortgage, you can find out more information below.

Who should we contact?

We have a dedicated team who you can contact to notify us of your loss. The team can be contacted by telephone.

What will you need?

When you contact us, we'll let you know what we need. Usually, the first document we'll need you to send us is an original copy of the death certificate. We can also accept copies which have been certified by a solicitor. Once probate or letters of administration has been granted we'll require a copy, alongside details of the personal representatives of the estate.

If one person dies, but it's a joint mortgage, what will happen to the other person named on the mortgage?

The lifetime mortgage will continue to run until the other person, who’ll become in effect a single borrower, dies or moves into long term care. We’ll need to be contacted so that we can update our records, but the surviving borrower will still maintain ownership of the home and the lifetime mortgage will continue as before.

What happens to the monthly interest payments?

If it's an Interest Select product, the interest payments will continue as normal. We'll let you know if we need you to update the bank details we hold for you, which will depend on the account which the payments are being collected from. If you decide that you no longer want to make the interest payments, you can contact us and we'll talk you through the options available to you.

Will an early repayment charge be applied?

No, we won't add an early repayment charge to the outstanding balance.

Will interest continue to be charged on the outstanding amount?

Yes. We’ll continue to charge interest until the outstanding balance is settled.

What happens to my monthly interest payments?

If you have an Interest Select product, your family can contact us to arrange to continue making the interest payments until the lifetime mortgage is redeemed. Alternately, the interest payments can be stopped and the mortgage can revert to an interest roll-up.

We understand that this can be a very difficult time. We try to make the process of informing Retirement Advantage as simple as possible.

Joint borrowers

If you're notifying us that one person is moving into long term care, but there is a second person who is named on the mortgage, you can find out more information below.

Who should I contact?

We have a dedicated team who you can contact to notify us of a move into long term care. The team can be contacted by telephone.

What will you need?

When we've been informed that one of the customer's is moving into long term care, we'll send you a form which the family doctor will need to fill in. We'll also require confirmation of their new residence.

What qualifies as long term care?

We define a customer to need long term care when at least 2 daily activities can no longer be performed.

What qualifies as a daily activity?

We use 5 daily activity indicators. Dressing (being able to put on, take off, secure and unfasten all clothes and, as appropriate, braces, artificial limbs or other surgical appliances); feeding (being able to feed oneself food which has been prepared and made available); mobility (being able to move from room to room in the home); transferring (being able to move from bed to an upright chair or wheelchair and vice versa); washing (being able to wash in a bath or shower (including getting into or out of either) or wash by any other means).

Does the customer have to move out of their property for it to be classed as long term care?

Yes, they would need to move out for long term care. If they don't move into a home, we still classify it as long term care if they move in with a family member or other carer.

If one person moves into long term care, but it's a joint mortgage, what will happen to the other person named on the mortgage?

The lifetime mortgage will continue to run until the other person, who’ll become in effect a single borrower, dies or moves into long term care. We will need to be contacted so that we can update our records, but the surviving borrower will still maintain ownership of the home and the lifetime mortgage will continue as before.

Single borrowers

If you're notifying us about the only person named on the mortgage, or the mortgage was has previously changed from being in two people's names to just one, you can find out more information below.

Who should I contact?

We have a dedicated team who you can contact to notify us of a move into long term care. The team can be contacted by telephone.

What will you need?

When we've been informed that the customer is moving into long term care, we'll send you a form which the family doctor will need to fill in. We'll also require confirmation of their new residence.

What qualifies as long term care?

We define a customer to need long term care when at least 2 daily activities can no longer be performed.

What qualifies as a daily activity?

Does the customer have to move out of their property for it to be classed as long term care?

Yes, they would need to move out for long term care. If they don't move into a home, we still classify it as long term care if they move in with a family member or other carer.

What happens to the lifetime mortgage?

If you're notifying us about a sole borrower, which means that the mortgage is only in their name, the mortgage will need to be redeemed. We'll talk you through the next steps and what we need from you.

How long will my Estate have to pay back the lifetime mortgage?

We ask that we receive the outstanding balance amount within one year. However, we know this can be a difficult time, so we can arrange an alternative agreement as long as you keep us updated as to the progress.

Does the money we use to repay the lifetime mortgage have to come from the sale of the property?

No. If you can repay the mortgage from an alternative source, you don't have to sell the property. We'll just need you to let us know what the repayment vehicle is.

What happens to the property?

The personal representatives of the estate are responsible for the property and, if necessary, arranging the sale. They also need to ensure that Home Buildings Insurance stays in place until the mortgage is redeemed. Please note that most insurers restrict their cover when a property is left unoccupied for more than 30 days. The personal representatives may need to check with the insurer that they have sufficient cover in place so that they are not in breach of the mortgage Terms and Conditions.

Will an early repayment charge be applied?

No, we won't add an early repayment charge to the outstanding balance.

Will interest continue to be charged on the outstanding amount?

Yes. We’ll will continue to charge interest until the outstanding balance is settled.

What happens to my monthly interest payments?

If you have an Interest Select product, your family can continue to make the interest payments until the lifetime mortgage is redeemed. Alternately, the interest payments can be stopped and the mortgage can revert to an interest roll-up.

Although this mortgage has been designed to last the rest of your life, there may be circumstances in which you wish to repay some, or all, of the outstanding balance early. We call paying back your mortgage 'redeeming' your mortgage, and a single payment is referred to as a 'redemption'.

Can I fully repay the outstanding balance at any point?

Yes. You can make a full repayment at any point, but because the lifetime mortgage has been designed to last the rest of your life, the payment might be subject to an early repayment charge (ERC). Your financial adviser will have explained how and when an ERC is applied, and it’s also explained in your Offer Letter.

Can I make a partial repayment at any point?

If you want to repay a part of the lifetime mortgage, you can at any point. The only condition is that there is a minimum loan balance of £10,000 remaining once the payment has been made. Because the lifetime mortgage has been designed to last the rest of your life, the payment might be subject to an early repayment charge (ERC). Your financial adviser will have explained how and when an ERC is applied, and it’s also explained in your Offer Letter.

How frequently can I make partial repayments?

There's no limitation to the number and frequency of partial repayments you can make.

Are there any additional costs to pay when I make a repayment?

We’ll charge a redemption fee of £200, which is an administration fee. If you're making a partial redemption, the administration fee is £65. You may also be charged an early repayment charge (ERC). Your financial adviser will have explained how and when an ERC is applied, and it’s also explained in your Offer Letter.

How do I know how much is outstanding?

Each year we'll send you an Annual Statement, which will show what your outstanding balance is as of January 1st. If you wish to redeem some, or all, of the mortgage, you can contact us or an indicative amount. We'll let you know at this point any additional costs which will be added (for example, any early repayment charge and/or a redemption fee).

What do I need to do to make a full repayment?

The best thing to do is to contact us. We'll then send you a Redemption Quote which is valid for 28 days. It will detail how much would be due on each of the 28 days, so that you can make sure you pay the right amount on your chosen day. If you don't make the repayment during these 28 days, you can always request another Quote when you’re ready to make the full repayment.

Will you confirm that the redemption has been successful?

Yes. We'll write to you to confirm that we've received your payment, and will let you know if you have over- or under-paid. When we have fully closed the account and our charge has been removed from your property, you'll receive a Closing Statement.