Two thirds of adults now claim some knowledge of equity release

  • 55% are unaware of new state pension charges

 A recent study commissioned by the Equity Release Solicitors' Alliance (ERSA) has found 61% of UK adults claim to have an understanding of equity release; with 78% of people able to identify correctly that equity release enables you to receive cash for some of the value of your home while you still live there.

Thirty six per cent of consumers say they were most recently made aware of equity release by reading an article and 33% said it was through an advertisement. Twenty five per cent of people say they last heard about equity release by word of mouth, with just 6% saying they most recently heard about it through a conversation with an adviser.

However, there is confusion among many people about the Government's plans to raise the retirement age for both men and women; only 45% of those surveyed were aware the state pension age will be 66 for both sexes by 2020. There is also confusion about how this will affect their planned retirement ages, with 41% unsure of the effect at this point. Twenty per cent of people say they plan to retire before the age of 66, with 15% saying they have now amended their expected retirement age to 66, and just 12% already anticipating they will have to work beyond age 66.

Table 1: Will the Government's plans to equalise and raise the retirement age to 66 affect your plans to retire?

I plan to retire before the age of 66

20%

I will now retire at age 66

15%

I plan to work beyond age 66

12%

Not sure

41%

I am already retired

12%

Source: ERSA December 2010

In terms of providing for their retirement, 20% of consumers say they might release equity from their property between the ages of 55 and 64, with a further 10% saying they might take this option in early retirement (age 65-69), and a further 13% anticipating they might take it out after the age of 70.

Claire Barker, ERSA

 Claire Barker, Chairman of ERSA, said,

"That property-rich people continue to plan early retirement, despite the planned rise in the current state retirement age of a year for men and six years for women, taking the earliest age people will be able to claim their state pension to 66 by 2020, means that already tight retirement finances will have to stretch even further. The result may be a gap that could be filled by people releasing equity from their home. Specialist advisers and solicitors will play an important role in helping people to make the right choices on this issue."

- Ends -

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