Retirement specialist Partnership has launched an equity release plan directed at those with health problems.

The enhanced lifetime mortgage purports to release up to 25 per cent more cash from their home than traditional plans that don’t use medical underwriting.

Retirees who smoke, or suffer from long-term illnesses such as diabetes, cancer or high blood pressure can all benefit from the ‘enhanced’ product.

The plan, which works in the same way to a lifetime mortgage equity release plan, is available to homeowners aged 60 and above and whose property is worth at least £70,000.

The group estimates that up to 40 per cent of customers will be eligible for this product. Partnership is a member of trade body Ship, offering extra guarantees such as never sliding into negative equity.

Ged Hosty, managing director of equity release at Partnership, believes equity release already provides a ‘much needed source of income’, and as a result, ‘Partnership has refined this exceptional new product to benefit those with compromised health conditions’.

He adds: ‘The enhanced lifetime mortgage will provide exceptional terms for homeowners with qualifying conditions or circumstances – smokers for example – and a simplified underwriting process means that a short list of medical questions can be completed online in minutes to confirm eligibility.’

Laurie Edmans CBE, chairman of Ship, recently highlighted the need for such a product to cover long-term care costs.

Francis Klonowski, principal at IFA Klonowski & Co, says the product is a 'very positive move' from a company with a 'strong reputation' in the market. 'I can see it having wide appeal, especially if it means being able to release more money from the home than would normally be the case with standard equity release lenders. Given the age at which equity release is made available, there is a good possibility that one or both may have suffered some form of health problems,' he comments.

However, he highlights that people considering equity release should bear in mind that it's an expensive way of generating money, interest rates are much higher than those of ordinary mortgages and crucially, families will inherit less.  

Saying that, Klonowski likes the idea of a plan to meet long-term care fees: 'It looks increasingly likely that people will have to accept that their home may have to be sold to meet the costs, once all other savings have been used.

'So if they can release equity instead, and the sum is determined on health grounds, this has to be to their advantage. It means they only need to commit part of their house value as needed, rather than selling the whole property.'

The minimum loan value with this new product is £25,000 and the interest is fixed at 7.7 per cent. In addition, there are no charges associated with taking out the plan.