The popularity of equity release is growing, but is this a good move?

By on 8th June 2020

Equity release is no longer the niche lending area it once was. More and more homeowners over 55 are choosing to release cash tied up in their homes and there are few signs of this trend subsiding.

Lending in 2018 increased by 27% compared to the previous year and is now nearly double what it was in 2016. It’s likely that the UK’s growing elderly population, where many don’t have the pension security of generations past, is partly behind this expansion. The growing variety of equity release products on the market could also be a factor. Newer products mean that homeowners are able to gradually release money from their property, rather than taking it as a lump sum.

Is it a risky option?

Equity release doesn’t exactly have a squeaky clean reputation. There have been past accusations of mis-selling and there are occasions where relatives find themselves receiving less inheritance than they might have expected.

Whether equity release is a suitable solution really depends on a person’s individual financial and personal circumstances. The Equity Release Council is a good place to find an adviser with the right qualifications.

As well as getting sound financial advice beforehand, it’s always best to be open with loved ones about releasing equity from your property. Two in three complaints to the Financial Ombudsman about equity release come from relatives of people who have died or gone into care. It can save a lot of upset later on to be open about releasing cash from a property when you do it, rather than further down the line.

The bottom line is that equity release can play a crucial role in supporting a full retirement, alongside pensions, savings and other assets, for the right homeowner. Since homes are most people’s largest asset, it makes sense to at least consider how this asset can be used to fund retirement. Downsizing in later life is another way of releasing money from your home. If you have any questions about ways you can increase your financial security in later life, please get in touch with us directly.

With over 25 years’ experience, Whitehall Partnership are truly independent and we’ll help you find the best equity release solution from all providers across the UK. We’ll take time to understand your personal needs and circumstances before we make any written recommendations. We also offer free home visits and with your consent, happy to include your friends and family members in our discussions together.

  • John L Taylor DipPFS, Certs CII (MP & ER)
  • Whitehall Partnership
  • 01384 946 000
  • 07977 985 306