Daren Carter, managing director of In Retirement Services, admitted his belief that people were not considering equity release schemes correctly. With concerns rife about the property market and house prices tipped to fall by analysts, an unplanned entry into equity release could result in the consumer losing out on money, he suggested.
If equity was released a year before it was needed, it would be the equivalent to a drop of almost £10,000 of the average UK property value, while releasing two years early equated to a fall of almost £20,000.
In Retirement Services expressed concern that speculation over a possible house price crash – as a result of long-term consequences of the credit crunch – could result in elderly customers rushing into equity release schemes without taking specialist advice.
Carter said: “Equity release plays a valuable role in enhancing the quality of life for many people, but it should not be a hasty decision. Equity release is a long-term commitment and all other options including State benefits and other assets should be considered first. We would urge anyone worried about the current market conditions to take professional advice.”
Jayne Almond, chief executive officer of Stonehaven, commented: “We don’t provide advice to consumers as we work through mortgage intermediaries and financial advisers, but we ensure that they tell the consumer that they need to know the details and what the costs are.
“The Key Facts Illustration for the products will show the costs and so consumers should have a good idea of what they’re getting into.”
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