Equity Release Gaining Popularity

A trade association Safe Home Income Plans (SHIP) has recorded an increase in the number of retired Brits who apply for equity release loans.

The period between July and September 2010 has seen unusual growth in the number of equity release loans.  The increase constituted 4% or a total of £205 million.

In the recent years, many UK retired people preferred lump sum scheme when it came to deciding on equity release loan type, because they needed money mostly for luxuries, home renovations, or to liquidate other debts.

According to SHIP, this trend has come to an end as the majority of people who take out equity release don’t want to take all the money out of their scheme right from the start and prefer releasing equity over time, as they need money.

Drawdown sheme has several benefits including lower final total of interest charges, flexibility,being in charge of the finances, etc. The popularity of drawdown schemes demonstrates that more British people apply for equity release loans to provide an income.

Andrea Rozario of SHIP says more retired people will consider taking out equity release loans in the remainder of the current year due to the cuts announced in the recent spending review.
 


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