Its report ‘Obstacles to Equity Release’, called for greater involvement from both central and local government to help relieve the complexities and remove the concerns surrounding the area.
The organisation discovered most people found equity release too complicated and many could not access it because it would have a detrimental impact on pension benefits, making them worser off than before.
The report said: ‘The commercial market now has suitable and safe equity release products for most older home owners. Those needing works, or additional care at home, face a complicated process and for those qualifying for means-tested benefits, drawing on equity can be hazardous as they can lose so much in benefits that they are little better off.
‘The government should reconsider the interaction between the entitlement to benefits and self-help through drawing on the equity in the home.’
The report also highlighted many properties were currently considered too risky by providers to lend on but could be brought into play if local authorities teamed up with lenders.
This would see authorities take on some of the risks from providers and help people in ex-council houses, for example, get access to equity release products.
Stuart Wilson, managing director at Equity Release Advisory Service, said: “Any support to removing the financial obstacles is welcome as people taking value out of their homes shouldn’t have their benefits penalised. It is morally wrong to penalise someone living on the poverty line if they want to improve their quality of life.
“The industry has done its bit. We have regulation and we’ve improved the products so now the government needs to take the baton on and do its bit.”
