Equity for debt problems?
10/01/2011People hoping to address debt problems using equity tied up in their homes may want to reconsider, according to a leading investment firm.
Senior investment adviser at Bestinvest. Adrian Lowcock, says doing this carries with it a number of dangers.
He thinks there are two major risks involved, saying the intial problem "first off, is inflation. You have that risk and it erodes the purchasing power of your money."
He added that "you're actually losing money by not having it earning interest somewhere."
The comments come as research published last week by the Financial Services Compensation Scheme (FSCS), finds that more than £7 billion in cash is being stored by people in their homes.
Director of Atlantic Financial Management, Kevin Still says, "Until the middle of 2007 releasing equity in your property was a common way of paying off unsecured debts, but it has become harder and harder through the recession.
Non-borrowing debt solutions like a Debt Management Plan (DMP) or an IVA are increasingly common ways of tackling unmanageable debt problems." 
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