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What impact can equity release have on quality of life?

23rd September 2021 Print

A post-pandemic property buying boom is driving up the prices of property across the UK. Meaning that older homeowners have more equity tied up in their homes than ever. 

Equity release schemes have been growing in popularity over the last decade or so. 

We look at what equity release is and how it’s improved people’s quality of life over the years. 

What is equity release? 

Equity release is a way of releasing capital tied up in the value of your property without having to sell your home and move somewhere smaller. 

Equity release loans are repaid upon your death, if you sell your home or if you move permanently to a care home facility. 

Essentially, equity release works like a mortgage, but you make no repayments until the property is sold. 

In some schemes, you’ll sell your home to the lender and become a permanent tenant in your home.

Who is likely to use equity release?

The typical equity release candidates are retired homeowners, usually of pension age, who have paid their mortgage in full and want to release funds to improve their lives and the lives of their family. 

What impact has equity release had?

Equity release experts, Key Advice, recently surveyed customers about their equity release experience. The following results were found in that study. 

Quality of life

In the study, over two thirds of Key Advice customers surveyed said that equity release had significantly improved their quality of life. 

90% of the survey participants also said they would recommend equity release to family and friends.

Boosting income

State and private pension plans have proved to be inefficient for some retired people. This is due to human beings living longer than previous generations. 

Equity release helped customers surveyed to boost their retirement income and improve their daily lives. 

Helping family

Instead of waiting to give their families inheritance when they pass away, equity release had helped surveyed participants to help their family financially while they’re still here. 

Often, participants had helped younger family members get on to the property market themselves by helping them with deposits. 

Improved mental health and well-being

Over 50% of respondents to the survey also said that equity release had had a positive effect on their mental health and physical well-being, largely through reducing financial worries.

Find the right equity release package 

There are many equity-release plans to choose from and it’s important to get the right one. Compare plans to find the one that suits you and your financial situation best.