Where once equity release' was seen as a downmarket' product with a poor reputation, suitable only for those in urgent need of cash.

Today, it is seen more as a form of financial planning and can be used not just to raise cash for specific purposes but also as a form of inheritance tax planning.

But it is important to note that this is not a panacea; there are time when it is appropriate to use and others when it is not.

Most importantly, it should only be used when there is a real objective in mind; simply wanting to have a little cash in the bank is not best achieved in this way, since the implicit costs are invariably greater than the interest rate that might be expected.

The term implicit costs' refers to the fact that schemes normally require no actual payment to the company providing the cash, the costs are all rolled up into the deal in some way or another, to be repaid when the property (or its replacement) is eventually sold.

There are two primary forms of Equity Release: Lifetime mortgagesa loan is granted against the value of the property and both the principal and interest roll-up to be repaid together when the homeowner (s) die, or no longer live in the property, perhaps because they have gone into long term care; and Reversion schemespart of the home is sold to the company concerned and both it and the homeowner (s) participate in future growth (or falls) in the value of the property in proportion to their share.

Under a reversion scheme, the amount realised will be less than the value given away' because the company providing the cash has to make a profit somehow. In general, the older the homeowner, the more cash that can be provided.

The leading providers of this service have banded together to form a Safe Home Income Plans group, with its own code of practice.

SHIP code of practice SHIP members provide fair, simple and complete presentation of their plans.

Client's legal work is always performed by a solicitor of the client's choice.

The certificate will clearly state the main cost to the householder's assets and estate.

All SHIP plans carry a "no negative equity" guarantee.

The Financial Services Authority does not currently regulate reversion schemes.

The above does not provide individual tailored investment advice and is for guidance only. Always seek independent advice from a qualified financial adviser.

E-mail: enquiries@sagegroup.co.uk or visit: www.sagegroup.co.uk Sage Financial Management Limited is authorised and regulated by the Financial Services Authority.