Equity Release and Inheritance Protection
One of the most common concerns about equity release is the impact on the estate you leave your family.
Important: Equity release is a long-term commitment and will reduce the value of your estate. It may affect entitlement to means-tested benefits. Independent financial and legal advice is required. All plans recommended are from Equity Release Council approved lenders. Your home may be repossessed if you do not maintain required payments on a secured loan.
About Equity Release and Inheritance Protection
Inheritance protection - also called inheritance guarantee - allows you to ring-fence a percentage of your property's value for your beneficiaries, regardless of how the loan balance grows. It is a standard feature on many ERC-approved plans.
The options we compare
How Inheritance Protection Works
You choose a percentage of the property's eventual sale value to protect - for example 30%. The lender then limits the loan to ensure that even with full interest roll-up, the protected percentage remains. The protected amount passes to your estate regardless of how long the mortgage runs.
What Percentage Can Be Protected?
Most ERC-approved plans allow inheritance protection from 10% to 50% of the property value. The higher the percentage protected, the lower the loan amount available. A plan protecting 30% on a £300,000 property guarantees £90,000 to the estate.
Does Inheritance Protection Reduce the Loan?
Yes - protecting a percentage of the property value reduces the maximum equity release available. On a standard plan, 100% of the equity (above the minimum no-negative-equity threshold) is available. With 30% protection, the maximum release is reduced to leave 30% guaranteed for the estate.
Inheritance Protection vs Voluntary Repayments
Voluntary monthly interest payments prevent roll-up without limiting the loan amount. Inheritance protection guarantees a minimum estate value without requiring monthly payments. Both are tools for managing the estate impact - we compare them for your circumstances.
No Negative Equity Guarantee
All ERC-approved plans carry a no negative equity guarantee - your estate will never owe more than the property sale value. Inheritance protection goes further by guaranteeing a positive estate value, not just a zero.
Which Lenders Offer Inheritance Protection?
Legal & General, Aviva, Just, Canada Life, More2Life, Pure Retirement, and most other ERC-approved lenders offer inheritance protection as a plan feature. We compare the inheritance protection terms across the market.
How We Help
Estate priority assessment
We establish how important estate preservation is relative to maximising the loan amount. The right balance is different for every client.
Protection percentage modelling
We model the loan amount available at different inheritance protection levels - showing the trade-off between release amount and estate guarantee.
Whole-market comparison with protection
We compare plans from all ERC-approved lenders that include inheritance protection - some offer better terms on the protected amount than others.
Completion
The inheritance protection percentage is documented in the plan and registered at the Land Registry alongside the charge.
Speak to our later life lending specialists
Call 0204 6211776 · Whole-of-market advice across all later life products · FCA No. 814533
Frequently asked questions
Is inheritance protection worth having?
Inheritance protection provides certainty that a minimum amount will pass to your estate. Whether it is worth the reduction in loan amount depends on your inheritance priorities and how much you are releasing. For clients releasing a small proportion of a high-value property, the trade-off may be minimal. For those releasing close to the maximum, the reduction is more significant. We model the specific trade-off for your circumstances.
Can I add inheritance protection after taking out equity release?
Most lenders do not allow inheritance protection to be added after the plan has been taken out. It must be chosen at the outset. This is one of the most important decisions to make before signing the equity release agreement.
Does inheritance protection protect against interest roll-up?
Yes - inheritance protection guarantees that the roll-up of interest cannot eat into the protected percentage. If you protect 25% and the property is worth £400,000, your estate receives at least £100,000 regardless of the loan balance. The lender limits the initial advance to ensure this is maintained.
What happens to the inheritance protection if I move home?
ERC-approved equity release plans are portable to a new property. The inheritance protection percentage applies to the value of the new property - so if you downsize, the protected amount reduces proportionally.
Is the protected percentage fixed or can it change?
The inheritance protection percentage is fixed at the outset and does not change during the plan. It applies to the eventual sale price of the property at the time the plan is repaid.