Four out of five equity release borrowers wouldn’t use a financial adviser
Less than a quarter (19%) of consumers would seek out an adviser to discuss equity release, according to a survey by Moneyfacts.
The financial information provider found that almost half of respondents (44%) feel they could handle equity release without advice. In addition, a quarter of respondents (29%) would not trust an adviser and 8% thought advice would be too expensive.
Deterred by drawbacks
However, over a third of consumers said they are deterred from taking up an equity release plan due to the impact on inheritance and 30% are put off by the interest rates on offer.
Rachel Springall, finance expert at Moneyfacts.co.uk, said: “The idea of taking out an equity release plan has clearly crossed the minds of many consumers, but what is worrying is that most of our survey respondents felt they could go through the whole process without seeking advice. This could be an expensive mistake down the line if consumers choose the wrong deal.
“More than half of consumers (52%) were adamant they would not use equity release to fund their retirement, which may mean they are sufficiently prepared for later life. At this moment, it seems that equity release is an option and not a necessity, as a third of respondents (34%) would only use it if they had no other choice.
“Although some consumers may be set up comfortably for their retirement, not everyone will be in the same boat. Some retirees with insufficient savings might feel that they should release equity from their home because they are equity rich but cash poor.”