Many UK consumers are in the dark over equity release, with more than half unsure just what the term denotes, research from Norwich Union has revealed.
Eight in ten customers did not know the age at which they would become eligible for equity release, which is set at 55, with one in five believing it was possible to take out a policy from age 18.
One-third of people did not know their inheritance tax liabilities would be affected by the policy, seemingly unaware that releasing equity on their home would minimise the amount of tax they later pay by scaling down the value of their secured assets.
Yet customers looking to buoy up their retirement income in the context of often inadequate pension provision can gain from equity release, insists Norwich Union, one of the market's leading providers in the area, as it launches an information drive around this much-misunderstood product.
In a further sign improved information may be sorely needed, one in five people told Norwich Union they did not realise the money they could pass on to their dependants would be cut by taking out an equity release policy.
Find out more about property tax
© Adfero Ltd