Is Equity Release the Answer to the Pension Crisis?
According to an All Party Parliamentary Group, equity release schemes could help Britain’s retired homeowners beat the pension crisis. However, they have stressed that better quality services, like high quality advice, should first be introduced by the equity release providers.
The All Party Parliamentary Group led by Baroness Hollis of Heigham and comprising of high ranking politicians from across the parties believe that, as more homeowners turned to equity release during the recent recession, others too could benefit from the merits of the equity release market.
Yet to achieve this, the image of the equity release market should be improved and the Government needs to show greater support.
Unlocking Some of the Value in Your Home with Equity Release
The burden of financial security in retirement is a major issue facing today’s Government with the collapse of the final salary schemes and the cost of living rising. This has led to some homeowners considering an equity release scheme.
Equity release schemes have the potential to unlock a lump sum or regular payments to supplement income in retirement. Yet people are still unsure about surrendering a stake in their home.
“Equity release products represent a real and immediate solution to financial problems facing older people”
Incorporating the Government could lead to better support and, as such, more transparency about the equity release market. This would dispel the levels of confusion that can sometimes put homeowners off.
For instance with any lifetime mortgage accredited by Safe Home Income Plans (SHIP) there is a no negative equity guarantee meaning that homeowners will never owe more than the value of their property and retain 100% ownership.
Andrea Rozario of SHIP said: “It is gratifying to see housing equity taking its place in the mainstream retirement funding canon. Of course, developments must be made and challenges lie ahead for providers, distributors, government and consumers alike - but the debate produced by this Group is the first vital step in bringing equity release much closer to the heart of government thinking.
“SHIP remains committed to changing the way that the equity release industry has historically been perceived. Equity release products represent a real and immediate solution to financial problems facing older people every day.”
Related posts:
