Equity Release Customers Have Average Loan Debts of £36′000
Equity release loans amongst retired people are growing in popularity, with more and more individuals now seeing them as a serious part of their retirement planning. One of the most popular reasons for someone taking out this type of loan is to consolidate their existing loan and credit card debts.
A new survey from Key Retirement Solutions has found that the average retired person taking out an equity release loan has outstanding debts of £35,991, made up of things like personal loans, credit cards, overdrafts and mortgages or home owner loans.
The survey results are based on information provided by the 3,501 individuals who took out an equity release loan with the company over the course of last year and has highlighted the high level of personal loan debt amongst retired people.
The survey also found that retired people over the age of 70 had a higher level of debt than those at 65, with the average amount of outstanding loans being £40,958 for this age group, compared with just £29,314 for the over 65 year olds.
The most common reason for outstanding debt is due to an existing home owner loan or mortgage, making up 27 per cent of cases, followed by credit card balances and it has been calculated that these debts cost an average of £297 per month for many individuals who simply can not afford such repayment amounts.
Dean Mirfin of Key Retirement Solutions said “Property wealth has enabled the over 65’s in common with the rest of the population to comfortably afford to borrow. Servicing debt can not continue to be a way of life once you no longer have an income to enable you to comfortably make repayments and clearly many pensioners will struggle to juggle loans, credit cards, overdrafts and mortgages.”
