Around one-in-eight (12%) UK homeowners aged 40 and above would consider releasing equity from their house to increase the income they have for retirement, according to a survey of 1,020 UK homeowners.
The average age the respondents think they would consider doing so was 66, the research from Canada Life suggested.
“For many homeowners, Equity Release can be an effective way to fund retirement, or simply boost income, while allowing them to stay in their forever homes and enjoy the retirement lifestyle they have wished for,” said Alice Watson, head of marketing, insurance at Canada Life.
Typically in the UK, the minimum age for an individual to be eligible for equity release is 55. Those younger often consider re-mortgaging to liquidise capital. But younger homeowners, those 40+, are now more likely to consider Equity Release in their financial plan, according to the research.
However, Canada Life also found some indication that people are suspicious of Equity Release as a financing tool.
Those that did not intend to release equity from their property cited wanting to pass down their property wealth to their family (36%) as the main reason for avoiding it.
Other reasons included: thinking Equity Release had a bad reputation (28%), believing debt in retirement was bad (26%), and reading negative media coverage about Equity Release (20%), among others.
“There are many homeowners who are still unaware of the benefits of releasing equity from their properties, or are reluctant to consider it due to misunderstanding the product,” said Watson.
“As an industry, we must dispel these myths and highlight the valuable role property wealth can play as part of a holistic retirement plan.”
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