The Lifetime Report examined the financial attitudes of 358 equity release customers and 630 non-equity release customers over the age of 50. Findings from the study confound the view that equity release customers are often unaware of all the options for increasing their retirement income.
Of those surveyed, 58 per cent of customers said they did not want to leave their current home, while 25 per cent felt their current home was already too small to downsize. Almost two-thirds (62 per cent) of equity release customers said they looked at other options for enhancing their income before taking out an equity release mortgage, while 91 per cent said they involved their families in the decision-making process.
In terms of how customers spend the money they release from their homes, 56 per cent of consumers said they used the cash to make home improvements while 61 per cent said it was used to finance debt.
Gus Park, head of buy-to-let at Mortgage Express, said: “Our research reveals that the average retiree is living on a household income of £11,800 – with a quarter of those who are yet to retire admitting they haven’t even started to save yet. Contrary to the beliefs of some, pensioners taking out equity release mortgages are exploring all the options and taking them seriously.”
Peter Wright, financial adviser at CBK, agreed with the findings. He commented: “The criticism of the equity release market is a bit unjust as many people seeking advice do have some idea of the products available to them. More and more people are starting to educate themselves about equity release, but there is still a long way to go and that is where independent advice plays a part.”
