The potential benefits of equity release should not be ignored in old age said secretary of state for work and pensions, David Blunkett MP at a lecture last week.
Blunkett's Graham Lecture to Counsel and Care was entitled: 'Squaring the Circle: Living Longer But Living On Less – Can we afford to remain healthy and happy?' and addressed the pressing issue of retirement and longevity.
According to Mr Blunkett, funding is becoming a serious issue in retirement as the population over 80 has doubled in the last few years. In addition to this, poor health is something that needs to be taken into consideration as Mr Blunkett explained that dementia is becoming a major challenge for families and paying for care can be extortionate.
And, apart from working until the last possible moment, Mr Blunkett suggested equity release
as a means of overcoming funding issues when it comes to retirement and care. Speaking at the lecture he said:
"In our endeavour to protect people's inheritance, have we not made enough of, and are we not clear enough about, the release of equity from the enormous homeownership that exists in Britain and the divide of those with and without assets which this trend has accelerated?"
Commenting further on the potential of equity release, Mr Blunkett added: "Through equity release programmes, a proportion of assets could alleviate the need to sell up or to enter residential care by offering the cash needed to sustain the existing lifestyle. There is a total of £700billion tied up in home ownership by those in retirement."
Commenting on the proposals, Dean Mirfin, business development director of independent equity release specialist Key Retirement Solutions, said: "For many pensioners their home is their biggest asset, and it is good to see at parliamentary level that equity release is increasingly being recognized as a serious element of retirement planning in the UK.
"Blunkett's call for more people to consider equity release schemes is testament to the increased consumer confidence in the industry. As the equity release market continues to go from strength to strength, completion increases, benefitting the end consumer with lower rates and a high quality of service. Equity release may not in itself be the solution to everyone's needs, but for many it may prove to be."
© Fair Investment