Gareth Morgan, Head of Ferret Information Systems, told the Mortgage Business Expo that there was no upper limit when the differences between benefits and tax allowances become negligible.
UK pensions credit systems are currently very complicated, to the extent that 28% of those eligible do not claim pensions credit. Before entering any form of home reversion plan or lifetime mortgage the intermediary needs to be aware and to make the customer aware of all possible impact on benefits.
Roger Hellier, Product Development Manager at Mortgage Express, noted that, in certain cases, for customers to increase their actual income per week they would need to significantly increase projected figures due to the changes that would be triggered on a means tested pension.
Hellier added that anecdotal evidence indicated that 40% of applicants to equity release schemes were affected by means tested benefits
