Indebted older homeowners are turning to Equity Release
A recent survey has shown that retired homeowners are turning to the equity tied up in their homes to clear their other debts including loans, credit cards and mortgages. Richard Espley Head of Equity Release reflects on this trend.
“The media regularly report on the social changes we are witnessing with an ageing population and a concentration of housing wealth amongst older age groups. However what’s becoming increasingly evident is that whilst these older homeowners have property equity they often aren’t in a comfortable position financially and have debts that they need to service.
“Older, retired homeowners are therefore looking to release property equity and using those funds to address a wide range of financial issues, sometimes in preparation for retirement. The survey has highlighted that 31% of customers (26% in 2014) used some or all of the funds released to settle unsecured debt such as credit cards or loans whilst 23% (21% in 2014) used some or all of the money they released to pay off their mortgage.
“It’s not just the young who have found themselves saddled with debt in recent years – older people have also struggled financially in the last recession despite their assets. Equity Release is playing an increasing role not just to provide an income in retirement but also to help address these other financial matters such as debt. And it’s not just their debts that lie behind their decision to release property equity. The survey showed that 26% spend the cash they release on family and friends.”
Content correct at time of publication