Equity Release 'No Longer A Last Resort'

Consumers' perceptions of equity release schemes have changed, according to one expert, who suggested that people no longer see it as a "last resort".

A spokesman for the charity which commissioned the research said that many people are now choosing this kind of option to free up money in later life.

"We're finding that a lot of people are actually using equity release to fund a similar or better lifestyle through their retirement," he remarked.

In many cases, people choose equity release schemes because they have a great deal of assets but are relatively "cash-poor", he added.

A financial advice firm recently predicted that the UK's equity release market would play an increasingly important role in retirement planning, but argued that consumer choice was still limited by the small number of "household names" offering products.

Head of banking at the firm said that equity release is a "genuine way" a number of people finance their retirement.

Equity release is the name given to the process which allows you to release equity that has been storing up in your home. The term is commonly used for borrowing more against the value of your home by taking a further advance on your mortgage.

However, the term is more popularly used when you sell or borrow against a proportion of your home in return for a cash lump sum that you can spend over the remainder of your life. Equity release schemes do not require that the loan is repaid within your lifetime. Similarly, if you sell a part of your house it will not be reclaimed by the company until you die or go into a care home at which point the property is sold.

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