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What is a home reversion plan?

A home reversion plan lets you sell all or part of your home in return for cash in retirement, and stay living there until you die or go into care. But how does it work? How is it different from other equity release schemes? And is it right for you?

How does a home reversion plan work?

  • If you’re over 65 and own your house, home reversion lets you unlock tax-free cash for a more comfortable retirement by selling a share of your home.
  • As well as cash (either as a lump sum or income) you’ll get a ‘lifetime lease’ – a promise that you can stay in your home until you die or move into care.
  • When you die or move into care, your family or estate gets your share of the proceeds from the sale of your home.
mature couple standing outside of a house together

How much cash could you unlock?

It really depends on your circumstances. The best way to know for sure is to call the SunLife Over 55 Equity Release Service on 0800 633 5566 and we’ll put you in touch with an independent expert adviser. You can also get an idea with our online equity release calculator. But as a rule of thumb, if you’re 65, it could be as little as 25% of your home’s market value, rising to around 60% if you’re 90.

You could sell up to 100% of your home but, because reversion providers only pay a discounted rate, you wouldn’t get 100% of the current market value for it.

Home reversion plan or lifetime mortgage?

Once you’ve established whether equity release is right for you, your choice between different equity release schemes typically comes down to either a home reversion plan or a lifetime mortgage.

While a lifetime mortgage means taking a loan against the equity in your home, a home reversion scheme involves selling all or part of your home to a reversion provider.

They both give you tax-free cash to spend in retirement, and in both cases you get to stay in your home until you die or go into permanent care. But the big difference is that with a home reversion plan you no longer own all of your home. With a lifetime mortgage, your home remains yours.

Is a home reversion plan right for you?

Once you’ve understood the difference between the types of equity release plans, it’s time to look more closely into the plan that could be right for you. When considering a home reversion plan, think carefully about the advantages and disadvantages.

mature couple shaking hands with an adviser

Advantages of home reversion

  • Guarantee an inheritance – You’ll know exactly what proportion of your home’s value will be left to your family
  • Get a tax-free lump sum – The cash you unlock is yours to spend any way you like
  • No monthly repayments to make – And no interest to pay either
  • Move home – Home reversion plans are portable, meaning you can move home and take your plan with you
  • Benefit from house price rises on the percentage you still own (if any)
  • Protect against falling prices – Because you’ve already sold part or all of your home, if house prices fall it won’t impact you or your estate on the proportion sold, unlike a lifetime mortgage where you still own your home (but build up interest over-time)
  • Inheritance tax planning – Home reversion could remove your home from your estate in terms of inheritance tax (there may be IHT payable)

Disadvantages of home reversion

  • Reversing it is expensive – If you decide to buy back the share you sold, you’ll pay the current full market value, not the discounted rate you sold it for
  • Your family could lose out – If you die or move permanently into care soon after taking out a home reversion plan, you will have sold all or part of your home for less than it was worth. This means the value of your estate will be significantly less than if you still had sole ownership and your family could sell your home and get it’s full value
  • You won’t benefit from future house price rises on the part of your home you sold
  • If you sell 100% of your property, there’ll be no property value to leave to loved ones, and you lose the option of unlocking more cash later
  • You no longer own 100% of your home
  • You have to be 65 – whereas you can get a lifetime mortgage from 55

Don’t worry, it’s regulated

You may have been wary of equity release schemes in the past, but equity release is now fully regulated and supervised by the Financial Conduct Authority (FCA) – providing protection and peace of mind for home reversion customers since 2004. Reputable equity release providers will also be a member of the Equity Release Council (ERC) – an industry body which sets high standards for it’s member’s follow.

older lady on the telephone

Whenever you’re ready, we’re here for you

For more information and to check your eligibility, call The SunLife Over 55 Equity Release Service today on 0800 633 5566 or request a call back.

Here's the information that you need to know about who we are and the other companies that we work with in order to provide our products and services.

Who are SunLife?

Phoenix Life Limited trades as SunLife and is the provider of the Guaranteed Over 50 Plan, SunLife Insurance and the life insurance policy payment option for Funeral Plans. Phoenix Life Limited’s registered office is at 1 Wythall Green Way, Wythall, Birmingham, B47 6WG (registered in England, no. 1016269). 

SunLife Limited distributes financial products and services and is a company limited by shares, registered office: 1 Wythall Green Way, Wythall, Birmingham, B47 6WG (registered in England, no. 05460862). SunLife Limited is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register (registration no. 769427).

You can contact us by post at SunLife, PO Box 1395, Peterborough, PE2 2TR or by phone on 0800 008 6060.

If you choose to add Funeral Benefit Option to your Guaranteed Over 50 Plan, Dignity Funerals Ltd arranges and provides the funeral services, registered office: 4 King Edwards Court, Sutton Coldfield, West Midlands, B73 6AP (registered in England and Wales, No. 00041598). Dignity Funerals Ltd is a member of the National Association of Funeral Directors.

Who provides the Funeral Plans?

Dignity Funerals Ltd arranges and provides the funeral services, registered office: 4 King Edwards Court, Sutton Coldfield, West Midlands, B73 6AP (registered in England and Wales, No. 00041598). Dignity Funerals Ltd is a member of the National Association of Funeral Directors.

The life insurance policy that pays for your funeral will be provided by Phoenix Life Limited, trading as SunLife.

Who provides My Smarter (ISA)?

My Smarter (ISA) is provided by Scottish Friendly Asset Managers Limited. Authorised and regulated by the Financial Conduct Authority. Details can be found on the Financial Services register, registration No. 188832. Member of The Investment Association. Registered Office: Scottish Friendly House, 16 Blythswood Square, Glasgow G2 4HJ.

Who provides the Will writing services?

Hugh James is authorised and regulated by the Solicitors Regulation Authority (SRA Number:303202).

The information contained on this website is based on Hugh James' understanding of the law of intestacy in England and Wales only as at April 2014. The law in Scotland and Northern Ireland is significantly different. This is for information purposes and is not intended to be legal advice.

Who provides Family Life Insurance?

SunLife Family Life Insurance is provided by Scottish Friendly Assurance Society Limited which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Details can be found on the Financial Services register (registration number 110002). Registered Office: Scottish Friendly House, 16 Blythswood Square, Glasgow G2 4HJ. 

Who provides SunLife Pet Insurance

SunLife Pet Insurance is arranged and administered by BDML Connect Limited. BDML Connect Limited is authorised and regulated by the Financial Conduct Authority (No. 309140). Registered in England and Wales Number 02785540. Registered Office: 45 Westerham Road, Bessels Green, Sevenoaks, Kent, TN13 2QB.

Who provides SunLife Home Insurance

SunLife Home Insurance is arranged and administered by BISL Limited and underwritten by a panel of insurers. BISL Limited are an intermediary authorised and regulated by the Financial Conduct Authority. Registered in England no. 03231094. Registered office Pegasus House, Bakewell Road, Orton Southgate, Peterborough PE2 6YS.

Who provides SunLife Car Insurance

SunLife Car Insurance is arranged and administered by BISL Limited and underwritten by a panel of insurers. BISL Limited are an intermediary authorised and regulated by the Financial Conduct Authority. Registered in England no. 03231094. Registered office Pegasus House, Bakewell Road, Orton Southgate, Peterborough PE2 6YS.