Meet Richard and Penny

Richard, 71, and Penny, 69, have been spending more and more time at home since they retired. They enjoy having friends and family over, and look after their grandchildren some weekends. They live in Edinburgh, and bought their home when they were in their early 50s. 

They’ve decided that they would like to make some home improvements now. Penny wants a new kitchen, as wear and tear over the years has left its mark. They also think that one of their bathrooms has become a bit dated and want to upgrade it.

Although they both receive state and private pensions, they don’t have a lump sum to pay for making these improvements. They thought about borrowing money from their children, but decided against it as their children were already stretched paying for childcare and school fees.

They talked to their financial adviser, who in turn put them in touch with an equity release qualified adviser. The adviser spoke to them about a capital and interest lifetime mortgage. He recognised that they needed a lump sum up front, but could afford to pay all of the interest and some of the capital back each year. This means that over time, the loan will be paid off and Richard and Penny can enjoy their home improvements knowing that they’re also able to leave an inheritance to their family.