According to a recent survey there has been an increase the number of older people that are using equity release schemes to raise money to pay off their debts, and are therefore failing to provide themselves with a nest egg for their retirement. In a recent survey of the equity release market it was revealed that the average age of those opting for equity release was getting lower, and more people that are not yet of retirement age are using these equity release schemes to pay off debts and keep up with bill repayments.
The report suggests that some equity release schemes, which are targeted towards older people, are open to people aged 55. The average age of the equity release customer fell to 68 in 2007 from 69 in 2006, according to the results of the study, which was carried out by Key Retirement Solutions.
High demand for these schemes saw the amount released rise by around 25% to £1.4 billion, and the report shows that around a third of this was used to repay debt and pay bills by twelve thousand homeowners.
One official involved in the research said that fewer and fewer older people had enough money to fund a comfortable retirement.
He added: ‘There are now some five providers offering products from age 55 onwards. We expect to see some of the new entrant providers during 2008 also offering plans to this age group.’
He also stated that the lower age of those turning to equity release ‘confirms our prediction last year that, as an increasing number of retirees do not have sufficient funds to live comfortably in retirement. More and more are turning to the assets tied up in their homes to supplement their income.’
Popularity: 36% [?]