Will Equity Release Affect My Benefits?
Some benefits — such as Pension Credit and Universal Credit — are means-tested and can be reduced or stopped if your savings or capital rise above a threshold. When you release equity, the funds become capital if held as savings, which may push you over those limits. This checker gives you a benefit-by-benefit view.
Figures are illustrative. Benefit rules change and depend on personal circumstances. Always check with the relevant benefits agency and seek specialist advice before proceeding.
Which benefits do you currently receive?
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How much are you thinking of releasing?
How much do you have in savings now?
How do you plan to use the money?
Your results
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This checker is for illustrative purposes only. Benefit thresholds and rules can change. It does not constitute financial or benefits advice.
Why benefits are affected
Means-tested benefits are designed to support people with limited income and capital. When you receive a lump sum from equity release, those funds become part of your capital — in the same way savings would be. If your total capital rises above the lower threshold for a benefit, your entitlement will be reduced. If it rises above the upper threshold, your entitlement will stop entirely.
The key thresholds in 2026 are:
- Pension Credit: capital above £10,000 starts to reduce entitlement; above £16,000, entitlement stops.
- Universal Credit, Housing Benefit, Council Tax Reduction: capital above £6,000 starts to reduce entitlement; above £16,000, entitlement stops.
How to minimise the impact
Spend funds promptly. Once equity release money has been spent — on home improvements, for example — it is no longer capital and no longer counted.
Use a drawdown plan. With a drawdown lifetime mortgage, you set a reserve facility but only draw funds when you need them. Undrawn funds do not count as capital, so you can access money in smaller amounts without pushing your total capital over the threshold.
Seek benefits advice first. Before proceeding, contact the relevant agency — the Pension Service for Pension Credit, Jobcentre Plus for Universal Credit — to understand the exact impact on your specific entitlement. A benefits adviser can help you plan the timing and structure of any release.
Benefits that are never affected
Not all benefits are means-tested. The following are based on contributions or disability assessments, not your savings, and are unaffected by equity release regardless of how much you release or what you do with the funds:
- State Pension — based on your National Insurance record
- Attendance Allowance — based on care needs, not means-tested
- Personal Independence Payment (PIP) — based on disability assessment
- Carer’s Allowance — based on caring responsibilities, not means-tested
Reviewed by Chris, CII-qualified equity release specialist · Last reviewed July 2026
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