Equity release used to pay off debt

Older people are resorting to equity release as a means to bring down their debt levels, according to new research.

The findings were published in Age UK’s Housing and Finance in Later Life, which revealed that more than a third of equity release customers have used the extra cash to try and become debt free.

However, less than half of those questioned said they were “very satisfied” with the value for money offered, as equity release often has high interest rates. As a result, some people may choose to look towards debt management to deal with what they owe as an alternative.

Age UK also found that debt was biting sooner for many older people, with the average age of people taking out an equity release scheme has fallen from 74 to 72.

Kevin Still, director of Atlantic Financial Management, says: "We have a high proportion of clients on Debt Management Plans (DMPs) who are over sixty and the average level of unsecured debt is over £27,000 with 7 creditors.

Clearing debt when you're approaching retirement age can be very difficult and where appropriate we involve specialist financial advisors to discuss the option of equity release."

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