Equity Release Schemes Easing The Burden Of Debt
Equity release schemes could help pensioners free up as much as £494 a month and, in the process, reduce stress by repaying debt according to research by Key Retirement Solutions.
KRS based their research on 1,761 customers who opted for an equity release scheme with them this year. The research was focused on the average net income of people releasing equity between January and August 2009, which equated to £1,299 per month. This gave those repaying their debt a healthy 38% rise in disposable income, allowing them to make more of their retirement.
In fact, equity release schemes are still seen as one of the most convenient ways of removing serviceable debt with 46% of KRS customers citing debt repayment as one of their priorities.
Having the burden of debt hanging around your neck, especially after retirement, can be a suffocating problem for many pensioners. With loans, mortgages and credit card bills mounting it can have an exhausting affect on your health, thus curtailing any enjoyment in your retirement.
Earlier in the year KRS estimated that UK pensioners were struggling with upwards of £183billion worth of debt. However, equity release schemes do appear to provide a viable solution to this problem especially considering Prudential research undertaken this year showed UK pensioners were sitting on £654billion in property equity courtesy of the rise in house prices. Utilising this revenue could go a long way to reducing the stress that comes with having debt.
The research by KRS highlighted how having such a rise in disposable income after repaying serviceable debt has led to a more tranquil retirement for UK residents.
Dean Mirfin, Key Retirement Solutions’ group director, said: “Much, understandably, has been said about the increasing levels of debt amongst UK pensioners and the huge effect this has on the quality of life in retirement. Many expect retirement to be a time to be debt free but in this latest research 46% of those releasing equity with Key had some form of debt which they wanted to repay.
“For many a solution, to help increase income through debt repayment, is equity release. A £494 increase in disposable income no doubt will have a considerable effect on the quality of life for many if not all UK pensioners who are servicing different forms of debt.”
For no-obligation advice on whether equity release could help you and information on the best plans please call our 24 hour helpline and speak to one of our advisors:
Or use the comments box below to ask a question.
Equity Release may involve a Lifetime Mortgage or Home Reversion Plan. To understand the features and risks ask for a personalised illustration.
Age Partnership provides initial advice at no cost and without obligation. Only if you choose to proceed and your equity release case completes would a typical fee of 1.5% of the amount released or £795 be payable.
Important things to consider about equity release:
- Equity release could affect your current or future entitlement to means-tested benefits
- Releasing equity to spend in your lifetime can reduce the amount that is left in your estate when you pass away
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