The findings reveal that 800,000 retired homeowners would or are considering taking out a home equity release scheme because of current poor returns on their investments and savings accounts. A further 18% - some 1.1 million retired homeowners - are considering selling their home to move into a smaller property to release some equity.
The research is perhaps not surprising when you consider the fact that around £313 million has been released through equity release schemes in the first six months of this year, an increase of 33% on the same time last year. The home equity release market is currently worth around £750 million but this could rise to over £7 billion within the next 10 years, according to the company.
Commenting on the findings, Colin Taylor, managing director at Key Retirement Solutions said: "The FTSE All Share has dropped more than 12% over the past 6 months and many savings accounts are now providing returns of below inflation after tax. Around two thirds of pensioners are now living below the poverty line or close to it. However, we estimate that retired homeowners have over £500 billion of equity in their homes which they can capitalise on to dramatically improve their standard of living."
The IFA market agrees with this view. Key Retirement Solutions also interviewed 58 IFAs, who all expect the equity release market to grow significantly over the next three years. Around 79% are currently providing advice to clients on these schemes and a further 9% said that they would soon start selling home equity release plans. Overall, 88% said that they view home equity release products in a positive light, with only 4% saying that they are a poor product.
