Sep 23 2008
People concerned that the level of money they have saved for retirement will not be sufficient have been issued a warning concerning equity release.
According to Which?, such schemes can be expensive and inflexible.
In a report entitled Care Options in Retirement, the organisation suggested that problems can arise when pensioners' circumstances change, for example when they wish to move to sheltered housing or into a retirement home.
Which? also stated that any money released by homeowners in this way can impact on the amount of means tested benefit they are entitled to, potentially causing them further financial strife.
Report co-author Philip Spiers stated: "Anyone considering equity release should do so cautiously and only after exhausting other options. In all cases, independent, professional advice should always be sought."
However, responding to Which?'s comments, Safe Home Income Plans suggested they were outdated, adding that equity release products offer increasing flexibility.
