Record numbers of older people are freeing up money from their homes – but doing so does have its drawbacks
An increasing number of older people are considering dipping into the value stored in their homes to help with the UK’s cost of living crisis.
Some want cash to upgrade their boiler or install solar panels for more cost-effective energy, according to equity release advisers such as Samantha Bickford at Clarity Wealth Management. Others are wondering how they can help family members struggling with rising prices.
The most common equity release deals are mortgage-based products that are loans secured against your home. Typically, there are no monthly repayments – the loan, including the built-up interest, is repaid from the sale of the property when you die or go into long-term care. These are known as lifetime mortgages.
Bickford recently helped a couple take out a lifetime mortgage on their property to release cash to pay off their daughter’s home loan because rising interest rates meant she was unable to remortgage.
“If homeowners cannot heat their homes or afford a warm meal due to their fear of the cost of living crisis, then using the cash tied up in their property may offer a solution to a problem they could not otherwise solve,” Bickford said.
Stephen Lowe at the retirement specialist firm Just Group says during the past year more people have been considering using housing equity to help their families.
