When people approach retirement, they often have plans of how they will spend their years of leisure that have taken a lifetime of hard work to reach  – going on trips to faraway places and enjoying spending time trying new hobbies. Of course, you need to have the funds to do this and many pensions that people will start to access when they retire won’t actually cover much in the way of fun activities.

And if you wanted to build on a conservatory or remodel part of your home, you’d need to find the funds from this somewhere. What many retired people are turning to in these circumstances is an equity release scheme, which helps free up some or all of the equity in their home, but is not payable until after they die and their house is sold.

This kind of scheme makes a lot of sense as property prices have risen so much over recent years, in comparison to the prices many soon-to-be retirees paid for their homes.

Age Partnership is an independent company that offers such schemes. Age Partnership equity release schemes come in four main categories, which give different options on how funds are released and paid back.

These are a lifetime mortgage, interest only lifetime mortgage, drawdown lifetime mortgage

and a home reversion plan.

The lifetime mortgage is where you get a lump sum for the whole or partial value of your home. The amount borrowed, plus any interest accrued, is paid back through the sale of your home after your death – or before, should you move into a residential care home.

The interest only lifetime mortgage is where you pay off the interest in regular instalments from the beginning of the loan, so that only the amount borrowed needs to be paid back after your death.

The drawdown option means that you can take money as and when you need it, rather than as a lump sum. This means that the interest payments will be lower overall – as you won’t be borrowing so much money for such a long period of time.

Finally, the home reversion plan is where you sign over ownership of your home in its entirety in exchange for a lump sum of cash, but can continue to live in the property rent free until you die.

There’s an Age Partnership equity release guide on their website where you can find out further details.