Rising number turn to equity release to combat debt

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.

Research shows that an increasing amount of older people are using equity release to raise money to pay off their debts rather than to provide themselves with a retirement fund.

According to Key Retirement Solutions, the average age of equity release customers fell from 69 in 2006 to 68 in 2007. These types of schemes are available to people as young as 55 with 5 providers offering products from this age group onwards.

Key Retirement Solutions said the falling age profile confirms their prediction last year that, as an increasing number of retirees do not have sufficient funds to live comfortably in retirement, a growing number are turning to the assets tied up in their homes to supplement their income.

Increasing demand pushed up the overall amount released by nearly 25% to £1.4 billion and over £500 million of this was used by around 12,000 homeowners to pay household bills or deal with debt.

Key Retirement Solutions recommend that anyone considering equity release should seek independent and specialist advice.

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