Equity Release figures show people consider it a viable way to help people supplement their retirement incomeTuesday 27 October 2015
Commenting on Equity Release Council figures release today, Alex Edmans from the Saga Equity Release Advice Service, said:
Equity Release figures show people consider it a viable way to help people supplement their retirement income
“The figures show an increasing awareness of equity release as a viable way to help people supplement their retirement incomes. The increase in drawdown plans and the popularity of these over lump sum plans, shows that the majority of people accessing equity release are benefitting from the flexibility drawdown plans provide. Drawdown plans help to keep initial interest costs to a minimum as interest is only charged on the amounts withdrawn, but they also give people the security of knowing that additional funds are available if they need them in the future.
“Lump sum plans have also seen an increase in popularity this is potentially as people are using them to clear mortgages. With lenders imposing arbitrary age limits on the people they are willing to lend to, many older people are finding that they have no other way to clear their mortgage. One in seven people over 70 are still paying off a mortgage, owing on average £40,000, this could be set to get worse as the number of people coming to the end of interest only mortgages increases. Almost two million people over 50 have an interest only mortgage they intended to pay off with an endowment policy, which is now going to leave them short One in 14 of these people say they have no idea how they will pay off their mortgage, for many of these people equity release could be well be their only solution.”
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