Equity release 'must be considered carefully'

The decision to release equity from the home "should never be undertaken lightly", an expert has said.

Gordon Lishman, director general of Age Concern, noted that equity release is becoming increasingly common - possibly because of a lack of savings.

"Many older people are 'asset rich' but 'cash poor' and increasing numbers are turning to equity release as a way of raising extra cash. The decision to release capital in this way should never be undertaken lightly."

An option to avoid having to resort to equity release could be to invest in long term savings through pension funds.

Mr Lishman noted that there could be a range of financial options open to older people to help them "consider the best way forward".

He added that although equity release can be good for some people, it is a "major commitment", and should therefore be considered carefully before a decision is made.

As an increasing number of people look to property to fund their retirements, equity release could become more common, but the security of a pension could prove to offer safer returns in the long run.