An increasing number of elderly debtors are turning to equity release as a way to reduce their arrears, new research has indicated.
Figures from the Key Retirement Solutions Equity Release Market Monitor revealed that 36 per cent of borrowers choosing equity release in the previous quarter were doing so in order to pay back debts, a statistic corroborated by the director general of Safe Home Income Plans.
Andrea Rozario noted that his company – which represents the majority of the equity release market – has witnessed a rise in the number of older people more inclined to resolve their debts and pay off loans.
“That, coupled with the fact that the fastest growing group of people in debt are those aged 60 and over, would seem to make sense,” he said.
However, he added that they are more likely to be paying off mortgages than any unsecured debts, as by turning to equity release they are freed from making monthly repayments.
By Sarah Adie