10 Facts About Equity Release

Below you will find ten facts about equity release which will provide you with background information on the UK equity release market.

1It has been estimated that people over the age of 60 have more than 80 per cent of Britain’s wealth and over £1 trillion in un-mortgaged equity. (Reform, ‘Old and broke: The long term outlook for the UK’s public finances’, June 2011).

2According to the Equity Release Council, 84% of people in their 60s and 70s own their own home and have more than £200,000 worth of wealth locked up in the property.

3According to a study by Age UK the top 3 ways in which survey respondents were making use of housing equity released were: House maintenance/repairs (46%); Holidays (36%) and Debt clearance (35%). Only 8% were using equity to pay for health/care needs.

4Sales of equity release products peaked in 2007 when members of the Equity Release Council (then SHIP) helped 29,293 people release £1.2bn in equity from their homes – an average of £41,348 per home. (SHIP 20th Anniversary Report, December 2011)

5In 2012, over 17,700 new equity release plans were taken out, to a value of around £925m.

6At the end of 1992, SHIP’s first full year of operation, only 570 people had used equity release products, releasing just £28.9m of equity from their homes.

7According to research carried out for Just Retirement, 54% of those in, or approaching, retirement can only afford to pay for a care home if they sell their house. However 67% resent having to sell their home to pay for care home fees if they need to go into residential care.

8 60% of respondents to the research carried out for Just Retirement wanted assurances that equity release products are regulated by the Government. Since 2007, equity release products have been regulated by the Financial Services Authority, when the Treasury expanded the scope of the FSA’s responsibilities.

9 A June 2010 study of equity release customers by Age UK found that 75% of respondents believed their equity release plans were right for their needs and 66% were “very satisfied” with the safety and security of their plans.

10The Pensions Policy Institute has reported that of working people who own their own home, 29% plan to downsize their property in order to provide retirement income, while 5% intend to use equity release to fund any care they require as they get older.