Two fifths of adults over 50 didn’t know the cash lump sum released was tax-free and a quarter incorrectly thought their children would have to repay the equity release, reveals a survey by SunLife
A third of over 50s fear they would risk losing their home if they took out equity release, a survey by SunLife has revealed.
The equity release provider said this misconception was one of several myths surrounding equity release, which it hoped to debunk.
Indeed, its survey also found two fifths of adults over 50 didn’t know the cash lump sum released was tax-free and a quarter incorrectly thought their children would have to repay the equity release. Meanwhile a further 37% didn’t know if children would be liable to repay.
Today’s regulated equity release products ensured a customer could never fall into negative equity, therefore children would have never to pay, SunLife said.
The survey of 1,000 homeowners aged 50 to 80 found that over a quarter didn’t know they could still leave inheritance if they opted to take equity release and almost half didn’t know that they can release equity from a home if they still have a mortgage.
A further six in ten did not believe or didn’t realise they can move home if they take an equity release.
With nine in 10 people over 50 still unsure about how it all works, there’s more we could be doing to explain the ins-and-outs of equity release, said Ian Atkinson, director of marketing at SunLife.
Especially as a quarter of people over 50 also think equity release will leave their children in debt, and over a third think you risk losing your home, neither of which is the case. Misconceptions such as these could be preventing thousands of people from getting money when they need it most, he said.
SunLife’s equity release research also found almost eight in 10 people over 50 didn’t completely understand equity release. Yet one in 10 said they were considering it to provide extra cash in retirement, which equates to up to 2.5 million adults in the UK.
The study also reveals the majority of over 50s don’t want to leave their homes. Over half said they love their home and don’t plan on moving.
Two thirds cited loving the area they live in as the reason they don’t want to downsize or move to save money. A further 45% say their home is close to local amenities, while four in ten say it’s close to their family and friends and a quarter are put off moving due to financial reasons.
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