A study of over 55’s by insurance company Aviva has revealed that older homeowners could potentially be missing out on much needed cash in their retirement because of misconceptions about equity release.
The survey revealed that while 82% believed they had a good understanding of equity release, only 15% said they would consider it.
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. If 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.”
What is equity release?
Equity release refers to the different ways you can utilise your home in order to generate income.
If you are over 55 and a homeowner, an Equity Release Scheme could enable you to release cash, tax-free from your home without the hassle of having to move.
There are normally two types of Equity Release Scheme.
- A Lifetime Mortgage –where you continue to own your home completely and are given a loan based on your age and the value of your property.
- Home Reversion Plan – where you sell all, or a share of your property, but still have the right to live in for the rest of your life in exchange for a single lump sum or regular instalments.
One in five of the respondents from Aviva’s online poll revealed they would not consider equity release in fear that they would lose their homes, however most modern equity release products do not affect ownership as they are now sold as lifetime mortgages that allow customers to take out a loan against their property.
Equity Release Schemes are not suitable for everyone, however, why not contact Peter Robinson & Co. for further advice and let our team of experts explain, in detail, the various options to help you decide whether Equity Release is right for you.