Consumer rights: 'Are my mum and dad being scammed out of their home?'
A worried daughter should consider interfering to ensure her elderly parents understand equity release and dealing with payday lenders
Sunday 29 July 2012
Q: My parents have been trying to sell their house for a while now and they've had one very good offer. But almost as soon as it was made they seemed to regret the decision to sell. I suspect they really don't want to move as they've been in their home for 40 years and love the area and the neighbours.
However, they're also getting very worried that their savings are dwindling and their pensions aren't enough to live on.
Someone has been trying to persuade them to go for a scheme that allows them to borrow some of the value of their home but go on living there. I haven't met this person, don't know anything about them and am worried that my parents are being pressurised into something dodgy.
If they did go for this kind of scheme it seems to me they would be, in effect, taking on a mortgage in their seventies. I don't want to interfere but I'm worried they could end up losing their home.
A: It always worries me if older people feel they are being pressurised into making decisions. If I were you I'd interfere and insist on going along to any future meetings between your parents and the person they've been talking to. It could all be above board and you may find that they've been talking to a financial adviser about an equity release scheme. Even then, though, they shouldn't feel under pressure to make decisions.
Equity release schemes have had a bad press because they used to be inflexible and poor value with the real chance that people could lose their homes. But, there is a new generation of equity release products from responsible lenders available, so your parents could find a scheme that suits them. Despite that, equity release isn't the answer for everyone and your parents need help to come to the right decision and find the right deal for them.
Homeowners who are 55 and over often find that almost everything they own is tied up in their property and they have very little left over to live on – asset rich and cash poor. Equity release allows them to take some of the value of their bricks and mortar as a lump sum or regular smaller sums, and stay in their home without having to make monthly repayments. Of course the deal with the lender will be that when the property is eventually sold the lender will get their money back. Your inheritance will be reduced as a result.
Your parents need to make sure they don't get involved with a rogue lender. Only buy an equity release scheme from an organisation licensed and regulated by the Financial Services Authority.
You don't want to interfere but you can persuade them that they should take the time go into this in detail. Find them an independent financial adviser who has experience of these kinds of plans and can talk them through the pros and cons.
You'll find more information at equityreleasecouncil.com or from Saga or Age UK.
Q: I took out a payday loan a few months ago when I needed an emergency repair on my car. But a few weeks later I was made redundant. I'd only been in the job a short time I didn't get any redundancy money. I haven't been able to get back into work so far and now the loan company is really piling on the pressure and the interest. At this rate I'll never be out of debt. I'm really worried, it's affecting my health and I can't tell my husband what I did.
A: You aren't alone on this. More and more people are finding themselves in your situation. These high interest loans can be life savers in an emergency – as long as you can pay them back in full on time. But they can cause mayhem in people's lives if things go wrong.
Charities that advise people in debt are working with the payday lenders to persuade them to treat borrowers in your situation more sympathetically. They want lenders to freeze interest and charges as soon as they realise their customers have lost their jobs, and to set up affordable repayment plans.
In the meantime get help from one of the free debt advice agencies like the Citizens Advice Bureau on the high street, call CCCS on 0800 138 1111 (cccs.co.uk) or the National Debtline on 0808 808 4000.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
Apple has been hit by complaints about the 1.1GB download
Liam Neeson's Downton dreams
Thriller is set in the secret world of British espionage
Bomber jacket worn by Mary Berry sells out within an hour
Much-loved cartoon character returns - without Sir David Jason
Actress to appear in second series of the hugely popular crime drama
- 1 Thailand beach murders: Thai PM suggests 'attractive' female tourists cannot expect to be safe wearing bikinis
- 2 Scottish independence: Five reasons Salmond is secretly hoping for a 'No' vote
- 3 Isis plan to 'behead random member of the public' in Sydney thwarted by Australian police
- 4 Scottish independence: Andy Murray backs Yes campaign in eleventh hour decision
- 5 Have you heard about the film Singapore has banned its people from watching? Well, you have now
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
Scottish independence referendum: A nation divided against itself
The political class is doing what Hitler couldn’t – destroying Britain
Scottish independence: Nationalist leader Jim Sillars threatens pro-union companies with 'day of reckoning' after independence
Portuguese academic says British are 'filthy, violent and drunk'
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
iJobs Money & Business
£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
£70-90,000: Saxton Leigh: Our client a London Market Insurer are seeking a Pro...
£60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...
£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...
Day In a Page
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony