Equity release for retirement 'might not suite every household'

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Equity release for retirement 'might not suite every household'

Moving to a smaller house and releasing equity to pay for retirement is not always a viable option, an equity release specialist has warned.

Safe Home Income Plans (Ship) has claimed that while £1.9 trillion worth of housing equity is held by over-55s, almost one-third of them (32 per cent) who lived in high-density areas would actually be worse off if equity was released - or would not release enough to adequately pay for all costs.

The study, which sampled incomes of those nearing retirement from 25 local authorities with high urban populations from across the UK, also found the added stress associated with moving house detrimentally impacted upon any financial gain downsizing could bring.

"For many people, the home is their largest asset and releasing some of the equity will help them finance their retirement," explained director general of Ship Andrea Rozario.

However, she added that equity release and downsizing should both be considered, but that they were not mutually exclusive and a lot depended on an "individual's financial situation and preferences".

Karen Barrett, of independent advisory website unbiased.co.uk, recently said it was vital that people consult as many different companies which offer equity release options as possible, as well as seek advice from interested parties such as family and friends.

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