Black believes that equity release should be considered alongside other options as a possible source of income in retirement.
His comments come in response to a guide published by consumer watchdog, Which?, advising that equity release should be seen as a last resort.
He says: “In an age of financial shocks, inadequate pension provision, low annuity rates and burgeoning levels of personal debt it seems somewhat hasty to arbitrarily downgrade one of the possible solutions. All options should be considered on their merits.”
The sales process of equity release requires that all options are fully considered, which will often result in finding a viable alternative. One such alternative highlighted by Which? is to downsize to a cheaper property.
Black says: “This is an appropriate solution for many people, but for others there may be emotional, social or support reasons which detract. There is also the cost of buying and selling, and it is often overlooked that the proceeds from downsizing may affect income tax liability and entitlement to means tested benefits.”
Although it is not likely to suit everyone, Black suggests that there are an increasing number of people who could benefit best from equity release.
He says comparing average long-term fixed rates for traditional mortgages to those of equity release, shows that a lifetime mortgage is marginally more expensive, but has the added peace of mind that comes with the no negative equity guarantee.