Why Would 90% of People Recommend Equity Release?
A recent report has indicated that 90% of people who utilised an equity release scheme either have or would recommend the process to their family and friends. This significant statistic indicates the popularity and success of the long-term loan scheme – but why is it so popular, and so highly-recommended to boot?
What Is Equity Release?
Equity release is a system by which those of age 55 or above can release the equity locked up in their home in the short term; equity release providers secure a loan against your home, to the value of your equity in it (meaning the value of your home minus any outstanding debts secured against it, or mortgage payments). This loan, most commonly referred to as a lifetime mortgage, can either be paid in a lump sum or in instalments over time, and often does not need to be paid off at all until your home is sold, either when you move into long term care or pass on.
The report, carried out by equity release specialists Key Advice, showed that 90% of their customers would recommend equity release to their family and friends, and that more than half of all surveyed had no regrets taking out an equity release. Of the remaining two in five that reported regrets, half were “positive” – with 15% of all respondents wishing they could have borrowed more, and 12% merely regretting that borrowing was part of their later life. The report found that £32.6 billion in property wealth had been released to its participants, amounting to around 557,000 individual customers.
Why Do People Recommend Equity Release?
The reasons that equity release has proven such a popular scheme are also reflected in the survey’s findings, as around 67% of Key customers in the last 20 years reported that it had made a “major contribution” to their quality of life. Exactly half of respondents indicated that equity release had lessened any financial worries with regard to day-to-day expenditure, and over a third indicated they were able to improve their standard of living in comparison to pre-retirement. Key’s CEO Will Hale commented on the scheme’s popularity, and its reasons: “Equity release has made a significant difference to the lives of many people and has evolved into an industry that with a clear focus on customer needs. Very few industries can say that 90% of customers would or have recommended their products to others and only 10% say that taking out a plan has not improved their standard of living. Given the scrutiny on the sector we felt an extensive survey going back many years would answer questions around whether customers had any regrets, which the majority do not. Although there is always room to adapt the market further to continue to provide positive customer outcomes.”