[Finance] Equity release

[Thunder Bolt]

Was this a few years back?

There were to-all-intents crooks (but big names) running equity release schemes, thankfully I think they were all squeezed out with a regulatory clampdown.

I remember an elderly couple on tv who were heartbroken to find out when they reached 80, the lenders took their home. They hadn’t realised their interest was so high, and hadn’t read the t&c properly. They were homeless.

 

[timbha]

I remember an elderly couple on tv who were heartbroken to find out when they reached 80, the lenders took their home. They hadn’t realised their interest was so high, and hadn’t read the t&c properly. They were homeless.

Probably in the bad old days of unregulated equity release. Now rebranded as Lifetime Mortgages and heavily regulated.

 

[Weststander]

Pretty certain there is no limit however if the person giving the gift dies within 7 years then that gift becomes part of the IHT calculation and could be subject to the 40% tax. However, I think the £3k limit is an annual exemption.

So, if you give away £3000 the year before you die it won't count towards your estate and the IHT calculation. If you give away £100k the year before you die then £97k will form part of your estate. However if you give away £100k and live for a further 7 years then none of it is taxed under the IHT.

PET’s …. that’s generally the case, unlimited, as far as IHT is concerned.

Not a typical scenario - I saw a taxpayer gift his second home to his son, it qualified as a PET and all good, he lived for a further 7 years plus.

The only snag was that he forgot about CGT. Land Registry and HMRC share all transaction data. He got landed with a huge CGT bill plus penalties.

 

[Weststander]

Probably in the bad old days of unregulated equity release. Now rebranded as Lifetime Mortgages and heavily regulated.

The Telegraph prefer lifetime mortgages in their advise, over:

 

[Weststander]

I remember an elderly couple on tv who were heartbroken to find out when they reached 80, the lenders took their home. They hadn’t realised their interest was so high, and hadn’t read the t&c properly. They were homeless.

I’ve listened to these stories. Similarly, folk who took out interest-only mortgages up to age 65 or 70, reached that age and booted out. Not wealthy by any means, just naive.

 

[Deleted member 37369]

I’ve listened to these stories. Similarly, folk who took out interest-only mortgages up to age 65 or 70, reached that age and booted out. Not wealthy by any means, just naive.

I worked for Cheltenham & Gloucester when it was a building society late 80s early 90s. There was a broker called Aylesbury Associates (in Bromley I think) that got in with the local C&G manager and did loads of Home Income Plan mortgages. C&G lent up to 70% of the value of the property - the homeowner paid off any mortgage they had, did a few home improvements etc ... the rest was invested to provide an income and cover the 'interest only' mortgage payment (charged at 1% above the standard rate - so very expensive back then).

I was manager of a branch in the same region and we call came under pressure to recommend 'elderly' customers to this company. I refused and spoke out against it. Loads of business was done on it. A year or so later, both property and stock markets crashed. Many of these poor people ended up in negative equity with very little to show from their 'investments'.

Roger Cook did one of his Cook Report programmes on it. When questioned, C&G's CEO stated that C&G didn't endorse Aylesbury Associates or the scheme. Hmmm funny that, because I was called onto a task force to try and help these customers out and find a solution ... so I saw the paperwork! Official mortgage applications which said C&G in association with Aylesbury Associates ( might have been the other way around ... but both names were on the C&G standard mortgage application form).

I went over to Bexhill at the time to help this one lovely old couple. Re-arranged their mortgage onto a fixed rate deal to at least keep payments the same. All sorted ... I went on holiday and came back to a message asking me to phone the lady. Called her to find out her husband had now died!! It was a traumatic time!

I then had a meeting with the C&G regional manager who pushed us to use this firm. All he was interested in was sales ... a nasty piece of work. I made the mistake of saying to him, "I told you so"!! After that he made my life hell at work and I ended up taking a redundancy type package!!

EDIT: Just found this ...

https://www.independent.co.uk/money...ople-will-still-be-out-of-pocket-1486818.html

 

[Weststander]

I worked for Cheltenham & Gloucester when it was a building society late 80s early 90s. There was a broker called Aylesbury Associates (in Bromley I think) that got in with the local C&G manager and did loads of Home Income Plan mortgages. C&G lent up to 70% of the value of the property - the homeowner paid off any mortgage they had, did a few home improvements etc ... the rest was invested to provide an income and cover the 'interest only' mortgage payment (charged at 1% above the standard rate - so very expensive back then).

I was manager of a branch in the same region and we call came under pressure to recommend 'elderly' customers to this company. I refused and spoke out against it. Loads of business was done on it. A year or so later, both property and stock markets crashed. Many of these poor people ended up in negative equity with very little to show from their 'investments'.

Roger Cook did one of his Cook Report programmes on it. When questioned, C&G's CEO stated that C&G didn't endorse Aylesbury Associates or the scheme. Hmmm funny that, because I was called onto a task force to try and help these customers out and find a solution ... so I saw the paperwork! Official mortgage applications which said C&G in association with Aylesbury Associates ( might have been the other way around ... but both names were on the C&G standard mortgage application form).

I went over to Bexhill at the time to help this one lovely old couple. Re-arranged their mortgage onto a fixed rate deal to at least keep payments the same. All sorted ... I went on holiday and came back to a message asking me to phone the lady. Called her to find out her husband had now died!! It was a traumatic time!

I then had a meeting with the C&G regional manager who pushed us to use this firm. All he was interested in was sales ... a nasty piece of work. I made the mistake of saying to him, "I told you so"!! After that he made my life hell at work and I ended up taking a redundancy type package!!

Did you know C&G branch folk in Hove or similar at the time, just out of interest?

 

[Neville's Breakfast]

Still doesn't make sense to me.

Say if you had a house worth £300k and you took equity release on a third, they would give your £100k capital.

If you died the next day, the property would be sold and they would get 1/3 and your family 2/3 of the value of the property. So they'd get £100k, and your surviving family £200k.

But your family would also inherit the £100k capital.

They have to get something back in order to be prepared to lend to people with no money or income. That something in your example is taking ownership of more than one third of the property in return for that 100k.

 

[Neville's Breakfast]

Was this a few years back?

There were to-all-intents crooks (but big names) running equity release schemes, thankfully I think they were all squeezed out with a regulatory clampdown.

Yes, around 15 years ago I think.

 

[Weststander]

Yes, around 15 years ago I think.

Googling, 2007 was the key year where home reversion plans were finally regulated.

 

[dazzer6666]

I’ve listened to these stories. Similarly, folk who took out interest-only mortgages up to age 65 or 70, reached that age and booted out. Not wealthy by any means, just naive.

Not even that naive in many cases - more taken in by lying shysters……..

 

[Deleted member 37369]

...

 

[Deleted member 37369]

Did you know C&G branch folk in Hove or similar at the time, just out of interest?

Possibly ... I was working in Hampshire when it originally kicked off and then I actually moved to the Hove branch in 1991 (I think).

 

[Weststander]

Not even that naive in many cases - more taken in by lying shysters……..

R4’s Moneybox and You&Yours only covered the humble granny’s, genuinely up **** Creek.

 

[Weststander]

Possibly ... I was working in Hampshire when it originally kicked off and then I actually moved to the Hove branch in 1991 (I think).

Your first post made me remember …. every professional in that little part of the world at that time, fancied C&G’s Rosemary

I knew someone called Ralph Tingley, I can’t remember if he’d worked at C&G, but years later we joked about it.

 

[Deleted member 37369]

Your first post made me remember …. every professional in that little part of the world at that time, fancied C&G’s Rosemary

I knew someone called Ralph Tingley, I can’t remember if he’d worked at C&G, but years later we joked about it.

I can't say I remember a Rosemary ... I've sure I would have if I'd met her by the sound of it! Maybe she was at the Brighton branch.

But then it was a very very long time ago

 

[Weststander]

I can't say I remember a Rosemary ... I've sure I would have if I'd met her by the sound of it! Maybe she was at the Brighton branch.

But then it was a very very long time ago

(Rosemary Abbott).

Phew … thought you might reply “that’s my wife you’re talking about”

 

[dazzer6666]

Your first post made me remember …. every professional in that little part of the world at that time, fancied C&G’s Rosemary

I knew someone called Ralph Tingley, I can’t remember if he’d worked at C&G, but years later we joked about it.

I was working in the Lloyds Private Banking UHNW office in Mayfair in the early 90s…..got a call from the receptionist telling me ‘some chap is up here asking if he can have a look round……he was walking past and saw the brass plate on the door’

‘Who is it’

‘Andrew someone…..Longman or something? Says he now works for the group’

‘Do you mean Longhurst ? ‘

‘Ah yes, that’s it’



Gave him a quick tour, seemed a decent enough bloke.

 

[Deleted member 37369]

(Rosemary Abbott).

Phew … thought you might reply “that’s my wife you’re talking about”

I missed a trick there

 

[Deleted member 37369]

I was working in the Lloyds Private Banking UHNW office in Mayfair in the early 90s…..got a call from the receptionist telling me ‘some chap is up here asking if he can have a look round……he was walking past and saw the brass plate on the door’

‘Who is it’

‘Andrew someone…..Longman or something? Says he now works for the group’

‘Do you mean Longhurst ? ‘

‘Ah yes, that’s it’



Gave him a quick tour, seemed a decent enough bloke.

Around 1988 I was manager of a small C&G branch - Winton in Bournemouth. It was a Wednesday as we were in our weekly training session when the manager of the main Bournemouth branch called to say that Andrew Longhurst was in the area and was going to call into our branch. Training session promptly finished and we did a quick tidy up and make sure there were no dead flies in the window (yes, that was something the CEO looked for )!

He came in ... had a little look around and then came into my office at the back of the branch. He sat across the desk from me with a big old camcorder that Mrs Longhurst had just bought him for Christmas. He then proceeded to ask me a series of questions while videoing me ... which was somewhat intimidating! I then learnt that he had played the recording at a senior management meeting at C&G HQ!!!