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Equity release 'used to cut debts'

By Sarah Engle, Fri 16 Oct 2009 - Published in Loans

Equity release is increasingly being used by the over 60s to reduce the amount of debt they hold, it has been suggested.

Andrea Rozario, director general at Safe Home Income Plans, said that there are many reasons for older people to use equity release and some providers have reported a rise in the number of people looking to cut the amount of money they owe.

"The fastest growing group of people in debt are those aged 60 and over, would seem to make sense. But I think it's more them paying off mortgages rather than unsecured debts," she explained.

Ms Rozario pointed out that by using equity release, older people can consolidate their mortgage and avoid needing to make monthly payments on their home loan.

The recent Key Retirement Solutions Equity Release Market Monitor found that 36 per cent of people using equity release did so to pay off their debts, increasing from 29 per cent in the previous three months.