Saga has launched an equity release product that allows people to take regular tax-free monthly payments from funds built up in their homes.

The Saga Regular Drawdown Lifetime Mortgage is the first of its kind on the market and lets borrowers set how much money they would like to receive each month, with a minimum of £200.

Alex Edmans, head of product at Saga Money, said: “Our customers have consistently told us that they want a solution that enables them to stay in the home they love, but to use it as a way of generating additional monthly money. For many that means they can pay their bills or financially support their children, whilst others can go out and socialise with friends a little more often or treat themselves occasionally.

“However, we believe that there needs to be more innovation in the industry to help people make the most of the equity in their homes but in a way that works for them. We are delighted to be challenging the market with the launch of our new regular drawdown lifetime mortgage, which enables homeowners to use the equity in their homes to really make a difference to their lives.”

The Saga equity release deal is available to people aged 60-80 with a UK property worth at least £150,000. Borrowers must take an initial tax-free lump sum of £10,000 and a minimum monthly payment of £200.

Missing out

The over-50s specialist added that four in 10 older homeowners admitted their pension pot was not as big as they expected, one in three had not forward planned their finances, whilst a third stated they are concerned about leaving an inheritance to their children.

Almost one in five adults believe that their children are dependent on their future inheritance and 53% would feel guilty if they didn’t leave an inheritance.