Equity release... time to take another look?


Our latest research has found that 39% of over-55s recognise that releasing money from the value of their home might be something that could benefit them. But only 15% say they would consider it. Why should this be? 

21% of over-55s who have no plans to take out equity release say they fear losing their homes. But with a lifetime mortgage, you remain the owner.

We think the past has a great deal to do with this situation. People still worry that equity release might mean they would no longer be the owner of their home, or that they might leave debts to their loved ones – and in years gone by, these were certainly issues for consideration, but different product choices are now available. Some providers still offer equity release products – called home reversion – which involve the customer becoming a tenant in their home, but these account for less than 1% of the equity release market.

Today’s equity release products include options which can put some commonly held worries firmly to rest. For instance:

  • You can protect some of the value of your property so you can pass on an inheritance
  • You can choose a product which guarantees that you’ll never have negative equity 

The fact is that modern equity release products – like the Lifestyle Flexible Option and Lifestyle Lump Sum Max from Aviva – have very little in common with the products of the past that may have put many people off the whole idea of equity release. 

Our survey said... 

1,200 homeowners aged over 55 gave us feedback in an online poll conducted by ICM Research in June 2014

  • More than a third of over-55s (39%) recognise the potential benefits of equity release but only 15% say they would consider it.

  • 82% say they have a good understanding of equity release.

  • But 27% think it involves selling their home rather than the more modern loan-based lifetime mortgages.

  • 46% of those who do not plan to use equity release want to ring-fence their homes for inheritance.

  • As they get older (over-65s) people are more likely to consider equity release. 

Take a look at the findings in our latest graphic.

Looking for a new way to fund your retirement?

Equity release products have changed – and as many people begin to look for different ways to provide an income for their retirement, you may find it’s worth taking a closer look. After all, retirement planning doesn’t have to mean just pensions.

Here’s what Clive Bolton, Aviva’s managing director of retirement solutions, had to say:

“The Budget changes announced this year will give people more freedom in how they take their retirement savings, which means they will need to plan carefully for the whole of their retirement and consider all of their assets.

“We know from our customers’ experiences that equity release can provide a valuable lifeline in later life, often around 70 years of age, when pensioners’ retirement income may be limited and they need some additional money,”               

There’s plenty of useful information on our website to help you decide if equity release would be the right option for you. You can use our Eligibility Calculator to help you find out if you could be eligible for a lifetime mortgage.

Whilst we are unable to give you financial advice, if you don't have a financial adviser already we can refer you to a carefully selected equity release specialist. This adviser isn't employed by Aviva but can only advise on Aviva's lifetime mortgages.

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