Pensioners turn to equity release
24 May 2004
More and more retired homeowners are turning to equity release schemes, and using the money for holidays, improving their properties, or simply as an escape route from financial hardship, according to a new survey.
A record £1 billion was borrowed through equity release schemes last year - nearly double the amount for 2000, according to the study, by Birmingham Midshires.
It found that one homeowner in six now plans to cash in on rising house prices through equity release.
As recently as 1999, fewer than a dozen companies offered schemes. But today, more than 40 companies are in the market, including newcomers Prudential, Saga and Standard Life Bank.
John King is chairman of Ship, which was set up in 1991 to establish minimum standards for equity release schemes. He said: 'Increased competition should benefit the consumer, but it will take time and effort for homeowners to decide which of the plans is best for them."
Tim Russell, director of the long-established equity release adviser Hinton & Wild in Cheltenham, Gloucestershire, said: "Every new company that joins this market is trying to offer something slightly different, so borrowers will be wise to seek proper informed financial guidance."