It is high time the Government considered equity release as a viable solution for funding pensioners' retirement, the equity release trade body SHIP has said.
A survey carried out by SHIP, of charities, consumer groups, equity release providers and independent financial advisors, has revealed the future role they expect equity release to play.
The research found that an "overwhelming majority" think more could be done to make homeowners aware of the potential benefits of equity release.
More than 80 per cent responded that the Government should take a more active role in raising consumer awareness and understanding of equity release schemes, as a "viable, realistic tool for financing retirement", SHIP said.
And, the respondents agreed that the current economic climate highlights the importance of this.
Nearly all respondents (92 per cent) said that they expect equity release to become a more popular solution to households facing financial difficulty as a result of the credit crisis, which has hit incomes that rely on returns from savings and pensions.
Consumers need guidance on equity release now more than ever, SHIP says, and 66 per cent of the respondents concurred that the financial crisis and subsequent distrust of financial institutions has had a negative impact on how people perceive the equity release sector.
Director general of SHIP, Andrea Rozario, believes that "In the midst of a pensions crisis and an ageing population, the government has a duty to pensioners to consider all retirement funding options - including equity release."
A recent survey conducted by SHIP revealed that those in retirement have an estimated £700billion tied up in housing equity, which, Ms Rozario said, is "money which could be used to improve the quality of life for many pensioners. The government has recently been debating the use of equity release but we urge them to go further in promoting it as a viable mainstream option for retirees."
She added that 2009 will be a pivotal year for the equity release industry, given the recession and the launch of the trade body's White Paper this summer, which is intended to set the future agenda for the equity release.
Kathryn Roberts, partner and equity release expert at Eversheds international law firm, which worked with SHIP to carry out the survey at a recent seminar on the future for the retirement funding solution, added:
"The results of the survey are indeed encouraging as they indicate broad consensus, both on the way forward for the industry and its relevance in this unprecedented economic climate.
"Contrary to some views that have questioned the future viability of the industry, these findings, coupled with the sector’s latest set of financial results, confirm that it will have an increasingly important role to play in providing alternative retirement financing solutions amid the current downturn and beyond."
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