Equity release tipped to become more popular

Posted 12/08/2009

Equity release schemes are likely to become increasingly popular among elderly Britons over the next 20 years, experts have predicted.

Retirement planning group Sovereign Reversions carried out a study and estimated that by 2029, over-65s would own £1.5 trillion worth of housing equity.

This is 88 per cent up on the current level – a trend driven partly by the likely surge in the number of people aged 65 or above over the next two decades.

Sovereign Reversions believes that factors such as reduced pension provision and longer life expectancies could lead to more elderly people using their property to generate funds.

“There will be no alternative to ensure pensioners can enjoy a reasonable living standard in their old age,” observed Graeme Marshall, chief executive of the group.

This comes after a study by consumer group Which? revealed that two-thirds of independent financial advisers are not giving homeowners satisfactory advice on equity release.

Homeowners were subsequently advised by the Equity Release Solicitors’ Alliance to seek legal advice from an independent specialist before committing to a scheme.