A recent survey, of over 300 respondents aged over 55, carried out by Moneyfacts has revealed that they are overwhelmingly opposed to seeking advice on equity release.
81% of those surveyed would not look for professional advice on equity release strategies. 44% of these, believe that they are able to complete the research and process on their own.
8% thought that advice from experts would be too expensive, with 29% swerving experts because they mistrust advisers.
69% of consumers believe they had a clear understanding of what equity release was; the majority of those surveyed would avoid using equity release and viewed it as a last resort. 52% firmly claimed that they would not use equity release to fund their retirement with 34% viewing equity release as a safety barrier, there to help in times of desperation.
This reluctance to release equity in their homes continued with the majority of respondents concerned of the impact equity release would have on their children and inheritance complications.
Rachel Springall, Moneyfacts Finance Expert, says: “The idea of taking out an equity release plan has clearly crossed the minds of many consumers, but what is worrying is that most of our survey respondents felt they could go through the whole process without seeking advice. This could be an expensive mistake down the line if consumers choose the wrong deal.
“Equity release won’t be right for everyone, so it’s positive to see that most of our respondents have considered the impact on their children or dependants’ inheritance. However, one area that could see improvement is striking up a conversation, as almost half of those asked have not discussed the topic at all.
“It’s important that consumers take the time to carefully think about equity release and discuss it with anyone who could be affected, which is why it’s good that these responses shed a light on consumers’ attitudes toward such a plan. Thankfully, equity release is being taken seriously and is not seen as a quick fix.”
When a staggering 48% of respondents have not discussed the issue with their loved ones, it is clear that communication on issues such as retirement, death and inheritance needs to drastically improve in the future.
Have you experienced clients struggling to understand equity release? Should more people consider equity release to help fund retirement? Does this reduce the amount of older people downsizing because they feel tied to their homes?