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  • Home Income Plan

Home Income Plan

How does it work? 

With a home income plan, equity is released through a lifetime mortgage or a home reversion plan and is automatically invested into an annuity that is built into the plan, to generate an income for life. A cash lump sum may be available in addition to an income, but the amount may be restricted.

An annuity is a plan that guarantees a series of payments in exchange for a cash lump sum. The income you receive will depend on prevailing annuity rates, your age at the outset and your gender.
The advantages and disadvantages of home income plans largely depend on whether the money is released through a lifetime mortgage or a reversion plan, however, annuities have their own set of pros and cons:

ADVANTAGES

  1.  A lifetime annuity guarantees that the income will be paid for as long as you live.
  2. Income can usually be taken on a level or increasing amount each year.
  3. With a home income plan annuity, you can usually get a higher income than would be payable from a standalone annuity.
  4. You may be able to take some lump sum in addition to the annuity.
  5. The older you are the higher the income.
  6. As interest is repaid automatically, the reduction in the home's value is mitigated.

DISADVANTAGES

  1. You are committed to an annuity as a means of extra income, leaving you no choice of alternatives.
  2. You can lose out by taking a lifetime income if you were to die soon after the plan is completed, unless the plan includes protection against this.
  3. You do not have the option of allowing the interest to build up, so the reduced annuity may not improve your financial circumstances greatly.
  4. Home income plans involve borrowing against your home and may work out more expensive in the long term than downsizing to a smaller property.
  5. Home income plans may affect your entitlement to state benefits and grants.

Home Income Plan

How does it work? 

With a home income plan, equity is released through a lifetime mortgage or a home reversion plan and is automatically invested into an annuity that is built into the plan, to generate an income for life. A cash lump sum may be available in addition to an income, but the amount may be restricted.

An annuity is a plan that guarantees a series of payments in exchange for a cash lump sum. The income you receive will depend on prevailing annuity rates, your age at the outset and your gender.
The advantages and disadvantages of home income plans largely depend on whether the money is released through a lifetime mortgage or a reversion plan, however, annuities have their own set of pros and cons:

ADVANTAGES

  1.  A lifetime annuity guarantees that the income will be paid for as long as you live.
  2. Income can usually be taken on a level or increasing amount each year.
  3. With a home income plan annuity, you can usually get a higher income than would be payable from a standalone annuity.
  4. You may be able to take some lump sum in addition to the annuity.
  5. The older you are the higher the income.
  6. As interest is repaid automatically, the reduction in the home's value is mitigated.

DISADVANTAGES

  1. You are committed to an annuity as a means of extra income, leaving you no choice of alternatives.
  2. You can lose out by taking a lifetime income if you were to die soon after the plan is completed, unless the plan includes protection against this.
  3. You do not have the option of allowing the interest to build up, so the reduced annuity may not improve your financial circumstances greatly.
  4. Home income plans involve borrowing against your home and may work out more expensive in the long term than downsizing to a smaller property.
  5. Home income plans may affect your entitlement to state benefits and grants.
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Company address: Family First Financial Ltd, 7 Bell Yard, London, WC2A 2JR T: 07951793579 E: mariankaikai@familyfirstfinancial.co.uk

Family First Financial Ltd is an appointed representative of Quilter Mortgage Planning Limited & Quilter Financial Services Ltd., which are authorised and regulated by the Financial Conduct Authority. Quilter Mortgage Planning Limited and Quilter Financial Services Limited are entered on the FCA register (https://register.fca.org.uk/s/) under reference 440718 & 440703.

Family First Mortgages Ltd is registered as a company in England & Wales No: 11432105. Registered Address: 7 Bell Yard, London, United Kingdom, WC2A  2JR.

The guidance and/or information contained within this website is subject to the UK regulatory regime, and is therefore targeted at consumers based in the UK.

Approver Quilter Mortgage Planning Limited & Quilter Financial Services Ltd 30/01/2025.

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