According to the equity release property developer, Economic Lifestyle, around 1.25 million pensioners are living below the poverty line, despite the value of their properties rising by an average of £1,500 per homeowner in the last three months. It is estimated that pensioners own £1 trillion of property, and research by the property developers reveals that nearly a million of these people will consider an equity release scheme in the next three years.
Our view
This is a valid point made by EL. It does seem strange that people can be struggling but yet their homes increase in value. Care should be taken with any form of Equity release be it Lifetime Mortgage or Cash Release Reversion Scheme.
People have to be very careful with equity release schemes. Read more about them in our Mortgage site.
Worried about spending money rather than leaving it to the children? Read our feature on Spending the Kids Inheritance - a real eye opener!