The system, FINTAL, looks at the impact which capital lump sums, monthly incomes or a mixture of both funded through equity release products will have on means tested allowances.
In a leaflet provided by the Council of Mortgage Lenders for equity release advisers it said: “For both forms of equity release transaction, advisers must consider whether the benefits to the customer of taking out equity release outweigh any adverse effect on the customer’s entitlement (if any) to means-tested benefits, and on their tax position.”
But the CML said it was not possible to cover every possibility through product literature prompting its collaboration with Ferret Information Systems to offer advisers a comprehensive checking tool.
Last month the CML’s director-general Paul Smee initiated talks between the residential mortgage and equity release markets to create more unity in anticipation of a rise in demand for the products.
George Osborne’s announcement in the Budget removed the stipulation that pension holders must purchase an annuity with their savings giving consumers freedom over how they spend their retirement pot.
The decision has led to speculation over what impact this will have on retirement planning and a greater need to use equity built up in homes.
Details of how to access the tax and benefits tool can be found in the leaflet.
