Some 51% of clients are completely dependent upon financial advisers to explain the relationship, said the trade body, which also found that nine out of 10 of advisers (91%) said they’re struggling to advise people confused about how equity release will impact on their state benefits because of a lack of clear information from government.
The equity release trade body commissioned the research which also revealed that almost a quarter of advisers (23%) referred their clients to another source for advice and answers.
However, while the Government might seem the most logical source of information, only 15% of advisers said they would refer clients to the Department of Work and Pensions (DWP) for help.
In addition, over a third of advisers (37%) felt that had no clear way of keeping up to date with changes in benefits rules. Those who did look to keep up with developments turned to sources such as the DWP, HMRC and Direct.gov (30%), trade press (11%) and computer programs and software (11%) for the latest information.
The research also suggests over 50% of equity release customers are missing out on state benefits that they are entitled to and 42% did not realise that their benefits might be affected by the decision to withdraw the equity in their homes.
One in 10 equity release clients believed releasing equity from their home might lose them state benefits altogether.
Director general of SHIP, Andrea Rozario, said: “These findings highlight how important it is that advisers have access to clear and consistent information, so that they are fully equipped to help their clients to navigate the benefits system, when choosing to release the equity in their home.
“Indeed, following the Chancellor’s Comprehensive Spending Review, and the announcement of a single universal credit to replace many other welfare benefits, many people may be unsure of what they are actually entitled to – which is where financial advice can play an invaluable role. However, if even advisers are struggling to easily navigate the convoluted benefits system, how are they to reassure their clients?
“At this time of review I would urge the government to take stock and listen to advisers, simplify the current system through the introduction of clear guidelines, and look for better ways of communicating the information they do provide. Financial advisers can help to ease the process of planning for retirement, but in order to do so they must feel as though they have the support of the government and their needs are being recognised.”
