Saga Approve Increased Use Of Equity Loans For Retirement Planning
Equity release schemes are finally beginning to lose the stigma which they earned in the late eighties and early nineties for being high risk, or even dangerous plans which could leave a customer worse off than if they had not embarked upon the scheme in the first place.
Since the introduction of SHIP (Safe Home Income Plans) with their clear literature, independent legal advice and no negative equity guarantee, equity release loans and mortgages have continued to increase in popularity, never more so than over the course of the last year or so.
Despite the fact that the total number of conventional mortgages and loans has declined dramatically over the course of the last year, equity loans and mortgages have seen an increase in sales of over 10 per cent in the last three months alone and the news has been welcomed by Saga, who have said that they regard the schemes as a vital component of an individual’s retirement planning.
A major reason for the increase of popularity of equity release loans is undoubtedly due to the fact that the vast majority of people are failing to make sufficient provision for their retirement by conventional means, such as pensions and investments, coupled with the fact that many of those who have invested have seen the value of their funds diminished by poor investment returns over the past few years.
Many people face retirement “asset rich but penny poor”, with all their money locked into the value of their home. An equity release loan allows them to release the value of this asset, whilst maintaining ownership of the property, without risk of losing it in the future.
Alex Edmans of Saga Equity Release Advice Services said “In the face of soaring pensioner inflation, we still believe that equity release can be a vital way for older people to tap into some of the value they’ve built up in their properties and use it to maintain their lifestyle in retirement. In particular, we’ve seen an increasing number of people who are reluctant or unable to sell their homes using equity release to pay for renovations.
We expect sales of equity release plans to continue to grow as it becomes more recognised as a key element in retirement planning.”
