Leading UK bank Scottish Widows has advised those looking into equity release mortgage products to consult their families before going ahead with the sale.
Equity release can use the value of your home to generate capital for spending or to use as part of your retirement fund or pension scheme but it will also impact on your family's future inheritance.
According to Scottish Widows' Murdo McHardy, head of product development and marketing, many people do not realise that inheritance tax will still apply to a person's estate, even if they have gone through with some form of equity release.
"Equity release could have a big impact on inheritance tax," he said. "You should definitely consult your family."
Mr McHardy added that other options aside from equity release should also be considered.
"We advise people to take financial advice from a financial advisor and legal advice from a solicitor," he concluded.
A large rise in the value of property recently means that several estates are in the inheritance tax bracket that would previously have been below the threshold and so this is something to take into account when deciding whether an equity release mortgage is right for you.To read more about mortgages, click here.
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