Equity release in the UK is a way for homeowners who are 55 or older to access the equity (the value of their property minus any outstanding mortgages) that they have built up in their home. This can be done by taking out a loan against the value of the property or by selling a share of the property to a third party.

There are two main types of equity release available in the UK: lifetime mortgages and home reversion plans.

A lifetime mortgage is a type of loan that is secured against the value of the borrower's property. The borrower retains ownership of the property and can continue to live in it until they die or move into long-term care. The loan, plus interest, is repaid when the property is sold, either when the borrower dies or moves into long-term care. The interest is usually rolled up, which means that it is added to the loan balance and increases the amount that must be repaid.

A home reversion plan, on the other hand, involves selling a share of the property to a third party in exchange for a lump sum or a regular income. The borrower retains the right to continue living in the property until they die or move into long-term care. However, when the property is sold, the borrower receives only a percentage of the sale proceeds based on the share of the property they retained.

It's important to consider the long-term implications of equity release, as it can reduce the value of the inheritance you leave to your beneficiaries, and it may affect your eligibility for certain benefits. It's also important to have the right professional help, such as a financial advisor, to ensure that the equity release product is suitable for your needs and that you are fully informed about the risks and benefits of the product.