Clearing Debt Still the Main Incentive for Equity Release

According to research by Age Partnership, independent equity release specialists, 46% of equity release plans taken out by their customers between August 2008 and July 2009 were used to clear debt.

The most popular individual reason cited was to clear the mortgage which incorporated 28% of customers. An additional 18% wanted to repay separate debts. Being free from the shackles of debt can lead to a more harmonious retirement, leaving you free to make the most of your time. This could include taking that dream holiday and for 3% of Age Partnership customers this was the main incentive for taking out an equity release plan.

Home improvements, which traditionally used to rank as one of the main reasons to release equity in your home, have dropped to third in the list of priorities with just 17% using the money from their equity release plan for this.

Equity release schemes have the ability to unlock money in your property so you can make the most of your retirement. You can take a lump sum up front or gradually release the equity.

However, it does affect the amount of inheritance you leave for any children but with a recent Key Retirement Solutions report suggesting 90% of homeowners discussed this with their siblings first it would appear most family members are in support of this.

Dan Baines of Age Partnership commented, “Over the last couple of years we’ve seen an increase in the number of people who are looking at equity release as a means of clearing debts such as personal loans and credit cards, thereby reducing their monthly outgoings.”

“And rather than stand in the way of this, the vast majority of children are very supportive, encouraging their parents to enjoy the improved standard of living that equity release can offer.”

‘By consolidating your existing unsecured debts, you may extend the term and overall cost of these debts’

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2. Credit Cards Terms Under Review as Equity Release Eases Debt
3. Equity Release Could Help Combat Rising Bad Credit Card Debt
4. Equity Release could be the answer to pensioner debt