Equity release ‘becoming more important due to rising debt levels’

Posted 22/01/2010

The rising levels of debt faced by many older homeowners has made equity release a more useful and relevant financial option.

This is the view of debt charity Consumer Credit Counselling Service (CCCS), which stated that the proportion of its clients aged over 60 has increased from five per cent in 2004 to ten per cent in 2009.

CCCS suggested that this age group is likely to have problems with their income due to factors such as retirement or illness, but are also more likely to be asset-rich and own homes.

Malcolm Hurlston, the charity’s chairman, therefore called on those in this group to make use of this capital, which could help them to pay off debts without the need to sell their property.

He said: “The judicious use of equity release can transform the future for many older people.”

This follows research from Key Retirement Solutions which shows that the proportion of equity release clients using the money to pay off debts has risen from 11 per cent in 2008 to 35 per cent in 2009.