Equity Release - Income in retirement

Homeowners who are thinking of releasing equity from their homes on order to get some extra money in times of economic uncertainty, may be able to do it cheaper than before.

A study by Safe Home Income Plans (SHIP) predicts interest rate reductions over the next three months to impact positively on equity release plans.

According to the survey, more than 90 per cent of providers believe there will be an increase in the volume of new business next year, due to dropping costs.

Currently the over 50s market holds about 80 per cent of the UK's overall wealth, but the majority of this is tied up in property. The survey says consumers will go for drawdown plans. This means that you can access a set amount of cash but you are not obliged to take it all at once. This method reduces the overall cost.

"More people are considering equity release because of the cost in utilities, council taxes and general day to day expenditure," said independent financial adviser Jason Hemmings. "It is also becoming increasing popular to help out younger family members who are struggling financially during the economic downturn."

An increasing number of people are looking at equity release to meet their income requirements particularly given the interest rate drops recently.

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