Article date: 9 June 2000
Norwich Union equity release schemes are proving popular withthe over 60s
Norwich Union's equity release products are proving very popularwith homeowners over 60. Since their launch, both the Flexible CashRelease Plan (FCRP) and the Flexible Income Release Plan (FIRP)have had significant uptake across the UK.
Daren Carter, Norwich Union's equity release marketing manager,said: "A sustained increase in property value over the past twentyyears has left many over 60s sitting on a substantial nest-egg.Norwich Union equity release products ensure that people in orapproaching their retirement can convert property value into eithera cash lump sum, or a regular and guaranteed income for life."
The two products are similar in that they both allow customersto release a percentage of the capital in their home to use eitheras a cash lump sum (FCRP), or receive an income for life, and aproportion as a cash lump (FIRP).
The money unlocked from the Flexible Cash Release Plan can bespent however the customer wants. Existing Norwich Union customerswith equity release plans have, for example, given money to theirchildren or grandchildren, visited friends and family livingabroad, bought new cars or made home improvements.
Alternatively, customers can choose to use the money released tobuy an income (FIRP). For example, a 70-year-old woman with aproperty valued at £100,000 could unlock £32,000 from her home andif she used all of this money to buy an income she could receive agross annual income of £2,542.56, for life*.
Key features of both equity release products are:
- Open to customers with properties worth between £60,000 and£500,000.
- No-negative equity guarantee.
- There is nothing to repay until the home is sold.
- Customers continue to own the house and are free to live in itas long as they wish.
- Customers can move house if they want to.
- Additional loans may be available in the future**
For more information on the Flexible Cash Release Plan and theFlexible Income Release Plan call Norwich Union on 0845 3002493.
* The annuity is guaranteed for 5 years, is non escalating andis paid monthly in arrears. The income available is based on theannuity rates in force at the date the annuity commences. Anyincome payment may be subject to income tax in the hands of therecipient.
** Subject to lending criteria at the time.
Liz Maw or Louise Zucchi at Norwich Union on 01603 683820 orJane Kirby at Lawson Dodd on 0207 580 1945
Notes to editors:
YOUR HOME IS AT RISK IF YOU DO NOT KEEP UP REPAYMENTS ON AMORTGAGE OR OTHER LOAN SECURED ON IT. However, there are norepayments to be made during your lifetime unless your property issold. The plans should be seen as a lifetime commitment.Substantial early repayment fees may be payable if the loan isrepaid for a reason other than death or long term care needs.
The Flexible Cash Release Plan and Flexible Income Release Planenable customers to take out a loan secured on their property.
The interest rate may change for new loans as it is based onprevailing market conditions. However, the interest rate for a loanis fixed on the completion date. Confirmation of the currentinterest rate, or a personal illustration can be provided onrequest.
Anyone living in the property, other than the customer(s), mustsign a waiver to their rights of occupation. If any new residentsmove into the property during the plan’s lifetime, NorwichUnion must be informed and waivers must be signed.
The customer(s) may be able to take out further loans under theplan. However, the availability of further loans is not guaranteedand terms will be those applying at the time the request is made.If the customer is entitled to state benefits they may be affected.Additionally income tax may also become payable.
The income under a Flexible Income Release Plan is provided by aNorwich Union Immediate Life Annuity. The income received under aFIRP is taxable as savings income.
The annuity has no cash in value at any time.
Full terms and conditions are available on request.
The Immediate Life Annuity is provided by Norwich Union Life& Pensions Limited No. 3253947, member of the Association ofBritish Insurers and regulated by the Personal InvestmentAuthority. Norwich Union Equity Release Ltd. Registered in EnglandNo.3286484 which is not regulated by the Personal InvestmentAuthority. Companies are registered in England at 8 Surrey Street,Norwich, NR1 3NG.
NORWICH UNION CASE STUDY
Mr and Mrs Hammond
Having had a hard but enjoyable working life as a chief buyerfor an electrical installations company, Henry Hammond decided heand his wife deserved a retirement free from financial worry. Theyconsulted their Independent Financial Adviser Phil Formoso ofPhilip Nicholas Partnership and looked at ways of helping themrealise their dreams.
The Hammonds considered three product providers beforediscovering Norwich Union's Flexible Cash Release Plan. Taking outthis plan meant that the couple would be able to free some of thecapital they had tied up in their home, without the worry andburden of monthly repayments.
Mr and Mrs Hammond discussed their plans with their twochildren, who were both keen their parents enjoyed their retirementyears. The Hammonds released 25% of the property value, as theywanted to feel confident that they still have enough money left topass on as an inheritance for the future of their threegrandchildren.
Recently the couple celebrated their 50th Wedding Anniversary,and having released the funds they were able to celebrate in style,inviting family and close friends to a party. Mr and Mrs Hammondalso made some dream purchases - they are the proud owners of a newcar, furniture for their home, and have invested the remainingmoney to be spent on future holidays and general livingexpenses.
Mr Hammond said, "I am delighted that we found the Norwich Unionplan. It means that we can get on with enjoying our retirementrather than worrying about making ends meet. The plan is extremelyflexible, and it has left us with the opportunity to leave somemoney to our children, while improving our quality of life."