Home & Capital has increased by up to 6.7 per cent the tax-free sum it pays single women and couples over 67 who want to dispose of their homes before they die.
A couple, both aged 67, with a property valued at pounds 100,000 on which they assign the deeds to Home & Capital would now receive pounds 35,730 instead of a previous pounds 33,500.
For a single woman aged 75, with the same value freehold property, the lump sum has risen 5 per cent to pounds 46,870.
The company explained its increased rates as having been caused by greater demand for reversionary properties among a range of investors, including pension funds, BES schemes and private syndicates.
Mark King, a director of Home & Capital, said: 'Many elderly homeowners have trouble making ends meet. They have tens of thousands of pounds tied up in their homes and do not want to move down market to release the equity.'
Reversions are unlike home income plans, which sparked a scandal a few years ago after thousands of elderly people almost lost their homes.
In the Home & Capital version homeowners can choose to sell all or part of their homes in exchange for a lump sum and lifetime rent-free lease. If a nursing home move is necessary a trust fund can be created and income paid for life. With a couple the lease runs until the death of the survivor.
Cecil Hinton, a partner of Hinton & Wild, a firm specialising in safe home income schemes, said: 'They may not be an option for some people, but for others they can be a tremendously useful means of finding extra income.'
He warned that cash lump sum options might not be suitable for all homeowners. 'If it is income you are looking for there are schemes providing that,' he said.
For example, the single woman aged 75 could get an annual income of about pounds 2,300 from her pounds 46,870 lump sum. A straightforward income version of the same scheme would pay pounds 3,800 a year.
It also pays to shop around for the best deal. Johnson Fry, a firm of advisers which also provides reversionary plans, refuses to quote for couples under 70 because of their potential longevity.
But a single female aged 75 could get a lump sum of about pounds 50,000, considerably more than Home & Capital pays.Reuse content