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September 27, 2007    

Over 60s could benefit from equity release

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by Kay Murchie

Equity release gives people access to the value they have built up in their home for their own use and is a choice for many looking to maintain or create a better lifestyle or to meet an unexpected financial need.

According to research from Norwich Union, those aged 60 and above have a collective £841 billion tied up in their properties. If the equity in these properties is released, it could significantly ease the financial burden.

Approximately, 66% of the population are over the age of 60 and they receive under £10,000 each year and have around £82,446 in the value of their properties. With a higher average house price in the south east, these are in the best position to reap the benefits. A total of £173 billion is available to improve their way of life. However, the over 60’s in the north east are not in such a strong position, their equity is £30 billion in comparison.

However, the Norwich Union research showed that 90% of people over the age of 60 were not aware of the value of the property. A spokesperson for Norwich Union said that this was no surprise as 50% admitted that they had never had a valuation whereas 30% said they had their property valued over a decade ago.

In spite of easing the financial burden, 68% would not consider selling their home, one of the main reasons being they want to pass it onto their children. The remaining 32% would consider equity release as an option but 26% would only do so in the event of life-changing circumstances, i.e. the death of a spouse or should long-term care became necessary.

The spokesperson concluded that equity release offers retirees the opportunity to get their hands on the financial value of their property without having to move home.

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