Prudential announce that equity release could free £611 billion for pensioners
Prudential have released figures this week which show that UK pensioners have approximately £611 billion worth of equity in their homes.
In contrast to the recent decrease in property prices, the Prudential Equity Release Index shows that there is still an estimated £611 billion worth of equity which could be released with an equity release product.
Pension annuities have been falling during the economic downturn and pensioners who hold guaranteed annuities have seen their rates fall as much as 10% in the past twelve months.
This fall in income means many pensioners are struggling and need to investigate other potential sources of income like equity release.
The vast majority of retired homeowners still have considerable wealth tied up in their properties
Using the equity tied up in their homes can provide a valuable income, Prudential says, especially during the current economic downturn.
The Director of Lifetime Mortgages at Prudential Keith Haggart said:
“Every homeowner is being affected by falling property prices, but it’s important to remember that many people, especially retired homeowners, bought their homes years ago and have benefited from growth in the housing market. Even in this depressed market, the vast majority of retired homeowners still have considerable wealth tied up in their properties.”
He continued by saying that equity release
“has an important role to play in providing retirement income particularly when other sources are under pressure”
“Annual figures from SHIP show that equity release sales in 2008 were almost £1.1 billion and were just nine per cent lower than 2007, despite the collapse in the wider mortgage market.”
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