The former chief executive of Irish Permanent, Mr Billy Kane, has set up a company offering to pay homeowners aged 70 and over cash in exchange for a share in their home.

Shared Home Investment Plan (SHIP) will pay a lump sum for a percentage of properties in good condition that are independently valued at €200,000 or more. Homeowners retain the legal right to live in the property for the rest of their lives or until they decide to sell and do not have to make any repayments.

Mr Kane has established SHIP with Mr Ciarán Deeny, an actuary who is formerly of Residential Reversions, the only existing company offering a similar scheme in the Republic.

Mr Kane said the plan was a way for older people to take advantage of the equity that had built up in their homes during their lifetime.

"Pension returns might be sufficient to cover living expenses, but the level of return is often insufficient to allow people to do many of the things they would like to do in their later years," he said.

SHIP will buy a minimum of 25 per cent of a property and a maximum of 90 per cent. It will pay less than market value to reflect the legal right of the owner to continue living in the property with no repayments on the lump sum advanced by SHIP.

The amount customers receive depends on their age and sex, with men getting more than women due to their shorter life expectancy.

For a property valued at €300,000, a man aged 72 would receive €82,370 for a 50 per cent share, while a woman of the same age would get €75,210. A couple of this age named jointly under the contract would get €67,450.

When the homeowner dies or leaves the property, it is sold and the proceeds are split between SHIP and the homeowner - or the homeowner's estate - according to the percentage of the home that was sold to the company.