A recently published report has found evidence of an increasing take up of equity release schemes by people in the 65-74 age group.
According to the Equity Release Market Report, published by the Equity Release Council, this group accounted for 59% of new customers in 2013, which is an increase over the 56% in 2011.
They are apparently attracted to equity release by the favourable interest rates available for equity release products and increases in property values.
The report also found that:
- Since 2011 there has been a drop of over 50 basis points (bp) to 6.36% in the average interest rate for equity release products. At the same time borrowing rates for overdrafts have increased by 45bp and for credits cards by 135bp.
- The average property value of an equity release customer is £254,943, which is 5% more than the UK average property value. On average, customers release less than a quarter of this wealth.
“A growing number of older people are using their properties to offer financial as well as physical comfort,” explained Nigel Waterson, Chairman of the Equity Release Council. “In a climate of low retirement incomes and a recovering housing market, equity release offers an increasingly attractive way to live comfortably in later life without sacrificing the place you call home.”
“Those choosing equity release enjoy low borrowing rates and three levels of protection through a structured financial advice process, face-to-face legal advice and product safeguards that have underpinned the industry for more than twenty years,” he added.
“No one retirement product offers a blanket solution to achieve financial security, but increasing numbers are finding an answer through equity release and it is an important and flexible option to consider in later life,” he concluded.
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