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Equity Release

Outdated ideas over equity release are holding homeowners back

Samantha Partington
Written By:
Samantha Partington
Posted:
Updated:
13/08/2014

Misconceptions about equity release products are holding older homeowners back from enjoying the equity built up their properties for retirement.

A survey of over-55s by Aviva showed only 15% said they would consider an equity release product despite more than a third stating they recognised the potential benefits of the schemes.

Over a quarter said they thought using an equity release product meant selling their home rather than using a loan-based lifetime mortgage. Meanwhile 46% said they were not inclined to use equity release because they were protecting their homes for inheritance.

The Aviva research found that while the over-55s felt they had a strong overall understanding of equity release (82%), many remained confused by how the products worked.

Nigel Waterson, chairman of the Equity Release Council (ERC), said: “The equity release market is experiencing record growth as increasing numbers of over-55s look to capitalise on their biggest asset – their home – to achieve financial security and stability in later life.

“However, there are some common misconceptions about equity release that do not ring true in today’s modern market. Iif these are not addressed, pensioners run the risk of missing out on a valuable product that can add a much-needed boost to their income.”

Waterson said modern equity release products have a number of safeguards to ensure over-55s can use equity release safely and with complete confidence.

ERC members provide customers with the right to remain in their property for life, while the ‘no negative equity’ guarantee ensures they will never owe more than the value of their home.

Customers have the option to ringfence a portion of their property to leave as inheritance.


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