Equity release 'could be used to help debt consolidation'
Published On 23 April 2007
More and more people could consider using equity release products to help them with debt consolidation, according to a new report.Defaqto revealed that it believes that the UK equity release market is about to enter a crucial stage in its development.
The company said that under-funded pensions, low annuity rates, demographic issues and pensioner debt have all contributed to a rising consumer willingness to consider equity release products.
Equally, Defaqto predicted that more people could need to consider equity release in order to consolidate their debt. It warned that the current trend for consumers to take out interest-only mortgages would only increase the problem.
"A number of factors are coming together which will make equity release an increasingly sought-after retirement solution for many people," explained David Black, Defaqto's head of banking.
"In particular, growing levels of pensioner debt combined with under-funded pensions and low annuity rates mean that equity release provides a genuine way forward for those struggling in retirement."
Recent figures showed that house prices continued to increase in the UK, meaning that people could continue to benefit from equity release.
