Research from over-50s specialist SunLife shows that when it comes to equity release, only 11 per cent of homeowners aged 55 or over fully understand how it works.
Delving further into the responses from the 1,007 people questioned (of whom 30 per cent would considering taking out an equity release loan), 55 per cent didn’t realise that the lump sum was tax-free (growing to 64 per cent in the 55-65 age group), and 52 per cent of respondents didn’t know that moving home is permissible once equity has been released.
SunLife equity release service director Simon Stanney says: “This is a generation that is generally property rich and cash poor due to healthy increase in the value of their homes, but inflation eating away at pension pots and increased living costs. But 62 per cent of those surveyed said they categorically did not want to downsize, which means the solution for the majority could be to unlock some of the value in their homes via equity release.”
That 62 per cent figure rose to 71 per cent when those aged 70 and over are asked if they would consider downsizing, according to SunLife’s research.
Despite the apparent confusion over equity release, the market saw activity in Q2 increase by 12 per cent as compared to Q1, with lending reaching a total of nearly £1bn.