Equity release advice proves unpopular | moneyfacts.co.uk

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Lieke Braadbaart

Online Writer
Published: 21/08/2018
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Our latest survey has found that less than a quarter of over-55-year-olds would seek out an adviser to discuss equity release, with 81% saying 'no' to advice for various reasons. This includes 44% who believe they can handle it on their own, which could prove rather dangerous.

A further 29% responded that they would not seek advice on equity release because they mistrust advisers, while 8% thought advice would be too expensive. This leaves just 19% who would seek out a financial adviser before agreeing to equity release.

That doesn't mean that equity release is dismissed entirely though. The fact that we received more than 300 responses – thank you to all who shared your views – shows that equity release has clearly crossed the minds of many. Indeed, 69% told us they have a clear understanding of what equity release entails.

However, our finance expert, Rachel Springall, pointed out that "More than half of consumers (52%) were adamant they would not use equity release to fund their retirement … At this moment, it seems that equity release is an option and not a necessity, as a third of respondents (34%) would only use it if they had no other choice."

Over a third (39%) are deterred by the impact it would have on retirement, while 30% are hesitant due to the interest rates on offer. "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," Rachel said.

"One area that could see improvement is communication, as almost half of those asked (48%) have not discussed the topic at all with their loved ones," she continued. "It's important that consumers take the time to carefully think about equity release and discuss it with anyone who could be affected. Thankfully, [the survey shows] equity release is being taken seriously and not seen as a quick fix."

That said, Rachel warns: "Anyone considering equity release would be wise to seek advice, even if they feel they know enough to make it through the process. Going directly to a lender, such as through an advertising campaign, may be easy, but it means customers won't get the independent comparisons that an adviser can provide."

What next?

Whether you think you know what equity release is all about or not, you may want to take a look at our equity release page. It not only features a table with the current providers operating in the market for easy comparison, but also plenty of information below the table that should help clear up any confusion about how equity release works and who it could benefit.


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