Key Retirement Solutions has warned older consumers about the rise in the number of unregulated companies offering sale-and-rent-back schemes.
The firm claimed that in the current financial climate, such schemes have begun to offer their services to people experiencing difficulty with their household finances.
Sale-and-rent-back schemes usually pay between 70 per cent and 80 per cent of a property's value before renting it back to the previous owner, however, Key Retirement Solutions has urged people not to rush into making such a large decision.
Dean Mirfin, business development director at the firm, said: "If people are considering unlocking any cash in their home the only advice should be to make sure they seek independent financial advice, ideally from an adviser that specialises in this area."
Baring Asset Management recently reported that 3.2 million people expect to rely on their property investments to provide an income when they retire.
Marino Valensise, chief information officer at Barings, said that it is "crucial" that people diversify their investments when planning for later life.
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