The safest way to a prosperous old age, said a recent survey, is to sell your home, bank the profits and settle for a cheap pad in bracing Skegness, where the burglary rate is far behind the national average. But the East Coast isn't for everybody. So when the Budget merely tinkered with inheritance tax (IHT) - the threshold rises slowly to £300,000 in 2007-2008 - many homeowners must have wondered about how to extract cash from their bricks and mortar. As house prices rise, more and more will be hit by IHT when they die. With a £275,000 IHT threshold from April 6, a £350,000 home can trigger an IHT bill of £30,000 - plus 40pc of the value of the rest of the estate. Homeowners can cut IHT bills, by taking some of the value of their property in cash during their lifetime. That's the attraction of equity release plans - which many financial advisers detest because they start a bill ticking like a taxi meter for the rest of your life. However, many older people don't want to move into a smaller home - and they would much rather spend the cash in their twilight years which would otherwise be lost in a Gordon Brown spending binge. New equity release plans unlocked £1.32bn from bricks and mortar in 2004, and the final quarter saw nearly 8,400 plans sold - more than 120 each working day. Homeowners have a choice of more than 40 equity release schemes. Two standard financial products can extract hard cash from bricks and mortar. Reversion plans enable a percentage of the home to be sold to a reversion company in exchange for a cash lump sum, while the resident keeps a lifetime tenancy. A one third share of a £210,000 home, for instance, which is worth £70,000 on paper will typically fetch about £40,000 from a reversion company, based on the owner's likely life expectancy. Lifetime mortgage plans advance a tax-free cash lump sum - with interest charged daily and "rolled up" until the property is sold and the debt repaid. Some accept homeowners as young as 55, on fixed or variable rate loans. On lifetime mortgages currently available at 6.8pc (fixed), a £100,000 loan doubles to a £200,000 debt, to be redeemed against the eventual sale price achieved on the house, within about 10 years. Norwich Union (NU) has launched a new equity release package - intended to give the insurer an edge over Northern Rock, its big rival in the lifetime mortgages sector. NU's Home Reversion Plan enables homeowners - aged 65 to 80 - to raise cash by selling all or part of their home, with no repayments needed in their own lifetime. Minimum payout is £25,000, on homes worth at least £75,000. To make the scheme more user friendly, NU agrees to pay more into the value of the customer's estate if the plan ends through death or a move into residential care within the first four years. A House Price Inflation Guarantee means homeowners can still benefit from sharp rises in the value of their home after they have signed up. NU is managing its scheme in a link up with the Newcastle-based Grainger Trust, Britain's biggest landlord and a public company with a portfolio of more than 12,000 properties. Grainger will look after properties which Norwich Union accepts into its scheme. | 
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