How can your home help you?

Your home might be the largest asset you own, and could be even worth more than the value of your pension. So if you need some extra money in retirement, whether that's for day-to-day bills, holidays or something else, how could your home help you?

Take a look at some of our suggestions below

Downsize and relocate

  1. If you no longer need all of the space in your home, then downsizing to a smaller property could free up money to spend in your retirement without the need to secure additional debt or loans. You may need to move to a different area to be able to do this, or you may want to relocate to a less expensive area, where you won’t have to compromise on space.

    Points to consider:

    • Moving costs -  Unbiased.co.uk suggests that the average cost of all the extras that have to be paid when you move (for example, solicitors, stamp duty, and fees) is £12,000.

    • Access to friends and family - How easy will it be to visit them?

    • Decluttering - With a few decades worth of memories housed in your family home, will they fit in a new property if you downsize?

    • Will you need that space in the future? - For example, so that a parent can come to live with you instead of moving into residential care.

Equity release

  1. Equity release

    There are two types of equity release.

    We offer lifetime mortgages. It's a loan secured against your home that allows you to release some of the money tied up in your property as a cash sum or smaller amounts, tax-free, as and when you need it.

    Points to consider:

    • We charge interest on the total loan amount plus any interest already charged. That means the amount you owe grows quickly and reduces the equity that's left in the property.

    • There may be cheaper ways to borrow money.

    • A lifetime mortgage will reduce any inheritance.

    Find out more about our Lifetime Mortgage 

    The second type of equity release is called a home reversion plan.

    With a home reversion scheme you sell all or part of your property at less than its market value in return for a tax-free lump sum, a regular income, or both, but stay on in your home as a tenant, paying no rent.

    Points to consider:

    • You'll receive considerably less than the full market value for your property.

    • You're no longer the sole owner of your home.

    • They can be inflexible if your circumstances change - not all equity-release schemes are portable from one home to another and you'll usually need the provider's permission for someone else, such as a relative, carer or new partner to move in.

Rent a room

  1. You could rent a room out, and under the Government's Rent a Room Scheme, it's possible to earn as much as £7,500 each year in this way, tax-free. The Rent a Room Scheme allows owner occupiers and tenants to receive tax-free rental income if you provide furnished accommodation in your only or main home.

    The limit reduces to £3,750 if someone else receives income from letting accommodation in the same property, such as a joint owner. The limit is the same even if you let accommodation for less than 12 months.

    View - Find out more about renting a room

Hire out your home for filming

  1. Some people hire out their properties as location sets for filming and photo shoots. It can be exciting to have film crews and actors take over your home for a number of days, and then see your living room for example published in a magazine.

    Points to consider:

    • Hiring out your home could be disruptive, as film and photo shoot crew might need to rearrange furniture.

    • There may be rules and regulations in place which may hinder hiring out your house for shoots.

    • Think about your neighbours. Will several vehicles or vans of equipment parking in the road be tolerated, or could it cause issues?

Rent out your driveway

  1. If you live in a city, near an airport or railway station, then your driveway or parking space could earn you income. There are online market places and tools that help you estimate how much your space could earn you on average, and also help you find potential tenants.

    Points to consider:

    • Fees, service and commission -  Different agencies will charge various commission fees to you or the tenant. Shop around to find the best solution for your circumstances.

    • Tax and insurance - There may be tax and insurance implications for you. If you're uncertain, seek advice from a financial adviser.

    According to the Government website View - Gov.co.uk, renting out a parking space doesn't require planning permission, as long as it doesn't cause a public nuisance to your neighbours.

Hosting a foreign exchange student

  1. Opening up your home to a foreign exchange student can provide company, interest and insight into other cultures, as well as a potential revenue stream. Programmes can be run by educational establishments such as local universities to international exchange programme.

    Points to consider:

    Hosting an exchange student can take up your time, as you'll be encouraged to immerse them in your family and local daily life and culture.

Remember, any income generated may have tax implications.