Equity release myths explained

Myth 6: There won’t be anything left to leave your loved ones

The Truth: Lifetime mortgages have become increasingly flexible in recent years, and there are plans available which allow you to protect a portion of your equity for inheritance.

Alternatively, if you don’t want your loved ones to have to wait until you die before receiving financial support from you, you could use equity release to provide them with an early inheritance. According to the Equity Release Council, customers across the market unlocked an average lump sum of £121,196 in Q1 2026.

Equity release will reduce the value of your estate and may affect your entitlement to means-tested benefits. If you’re considering gifting to family, you may need specialist tax advice, which is not provided by Royal London Equity Release Advisers.

If you fall into the band where inheritance tax (IHT) is a consideration, equity release could help minimise your potential liability. This depends on individual circumstances and tax rules may change. Additionally, provided you live for another 7 years after making it, there may be no inheritance tax to pay on gifts to your loved ones.

Using a lifetime mortgage to give a cash gift may incur an inheritance tax liability. Your adviser can discuss this with you further. Taxation advice is not regulated by the Financial Conduct Authority or the Prudential Regulation Authority.

Myth 7: It is an expensive way to borrow

The Truth: Releasing equity with a lifetime mortgage doesn’t have to be expensive.

There are a variety of features available that could help you to control the costs.

For example, you could release your equity in stages using a drawdown facility. Or you could control the impact of interest by choosing to make optional payments. Without payments, interest will build up over time, increasing the overall amount owed. Since interest rates are fixed for life, you will always know exactly how much it might cost you.

Your personal equity release adviser will also provide a personalised illustration, showing how much you could owe over time should you choose to release equity. You can use this to consider your plans and whether you want to make any payments over time.

Do you have more questions about equity release?

If you want to continue getting the truth about equity release, The Telegraph Media Group Equity Release Service may be able to help.

By filling out the calculator on this page, you will be put in touch with the trusted providers of this service, Royal London Equity Release Advisers.

Royal London Equity Release Advisers recommend plans from across the whole market, coming only from lenders that are members of the Equity Release Council. This means that you will benefit from their customer-focused standards. Their advisers will also help you to consider other financial products like retirement interest-only mortgages and traditional mortgage borrowing. Through comparing a range of options, you can find one that works for you.

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