Equity Release can help stave off debt in old age
Old Mutual’s Redefining Retirement report is the latest survey to show that old age and retirement, rather than being a time to relax after a lifetime of work, is for many a time of worry and stress coping with debts. Debt charity StepChange has reported an 80% increase in the number of over 60s contacting them about debt problems in the period 2012-2014. Their clients report average debts of just over £18,000 but the Old Mutual report shows that, for some, the problem of debt amongst older people is much more severe. Their findings, surveying over 65s show that 19% have debts of over £50,000 whilst almost 1 in 10 has debts of £100,000 or more.
A separate survey conducted by Scottish Widows shows that more than 1 in 3 of 50-59 year olds are paying off a mortgage whilst 14% had credit or store card debts and 6% had unsecured loans.
Richard Espley Head of Equity Release comments:
“These various survey findings all paint a consistent picture – that there are a significant number of older people who are nearing retirement with considerable debts remaining. Some people will have insufficient earning years ahead of them to discharge their debts.
“Some of these older people will use the new pension freedoms and access their cash to pay off their debts. However others with more meagre pension savings will need to take a different route.
“Equity Release can be used as a means to repay debts whilst the homeowner remains in their home. Older homeowners with properties that are now worth more than when purchased can release property equity and use that money to repay their mortgage or any other debts whilst continuing to live in their own home.”
Content correct at time of publication