The word 'flexibility' is so important when dealing with all financial products and this is especially so with Equity Release schemes. Flexibility simply gives you options, and when money is involved it's often the case that your financial situation today is different from that of a few years later. So why sign yourself up to something that is 'inflexible' and can't bend or deviate with your needs? Two new equity release plans by the Prudential and Just Retirement are therefore welcomed because they offer folk just this concept of flexibility, whereas other firms selling ER do not.

• If you need to know more about Equity Release then please see the LearnMoney main ER section

What Exactly Is 'Flexibility' With Equity Release

• Basically it means that you don't have to draw down all the money at once
• For example, with the Prus scheme you take an initial lump sum of a minimum $20,000 and can drawdown payments over time of $5,000 up to an agreed limit
• Before this kind of flexibility people could only take a lump sum and were generally drawing down too much for safety reasons
• What made matters worse was than some unethical equity release advisors then advised clients that the excess money should be invested, often at a lower interest rate than the interest being paid on the original ER scheme
• Of course as you'd expect the 'advisors' then made juicy commissions from all of this
• The flexibility angle therefore combats these kinds of problems

What's The Difference Between The Prudential's & Just Retirement's Equity Release Plans

• The main different is the interest rate charged on the loan, Pru's is 6.45% and Just Retirement's a more competitive 5.99%
• And significantly both rates are far cheaper than most other ER plans being sold which offer zero flexibility
• For this reason both of the these deals are probably the best on the market right now, but it's also a 'hot sector' so look for better deals over the coming year
• Obviously the charges vary between the two ER plans so make sure you study and compare these in detail
• But the main focus on any financial deal where you're borrowing a large amount of money must be the interest rate. Although this doesn't in any way that charges are irrelevant