Inflation 'causing pensioners to release equity to pay debt'

www.moneynews.co.uk > Debt > Inflation 'causing pensioners to release equity to pay debt'

Inflation 'causing pensioners to release equity to pay debt'

Fri 15th Jan 2010

Rising food and fuel prices have been cited as one of the main reasons why an increasing number of older people are releasing equity from their homes in order to pay off debt.

Independent Age's director of policy and communications Simon Bottery said this inflation, coupled with the impact low interest rates have on income from savings, is forcing this demographic to either reduce spending or turn to schemes like equity release in order to get by.

Key Retirement Solutions' UK Equity Release Market Monitor revealed this week that debt repayment was the reason for 35 per cent of equity releases in 2009 - up from 11 per cent in the previous year.

The fact that more than 66 per cent of over-65s own their homes outright makes it "easy to see" why this trend has emerged, Mr Bottery suggested, but he recommended that people should explore other avenues to pay off debt first.

"We would urge them to first ensure that they are claiming all available benefits - up to £5.4 billion of benefits goes unclaimed every year," he commented.

Click here for more debt news

Related News : Debt
	Lessons in financial responsibility 'are important for young people'
	Payday loans 'can lead to significant financial difficulties'
	Brits 'becoming more focused on financial wellbeing'
	Serious debt issues emerging, says expert
	More women 'are facing debt problems'
	Debts 'down slightly in February'
	Brits 'should focus on reducing borrowings'
	Paying down debt is 'better value than saving'
	January a 'gloomy month' for indebted Brits
	Most expensive debts 'must be paid first'