9 in 10 over 50s still believe common misconceptions about equity release

Just 6% of homeowners over 50 – who are aware of equity release – actually understand all of its product features, according to new research by SunLife.

SunLife interviewed 2,000 people over 50 and discovered that misconceptions about equity release are still rife amongst this age group – despite the industry undergoing significant changes over the past few decades to offer safer, better-value products to consumers.

When presented with a series of basic facts about equity release and asked which they already knew to be true, 94% noted at least one fact that they weren’t aware of.

The biggest misconception about equity release plans is that you cannot move house. Just 24% of people correctly identified the fact that you can still move house if you have an equity release plan in place. Less than a third (30%) knew that some types of equity release have no monthly repayments, that they can ringfence money for inheritance, or that they can include a ‘no negative equity’ guarantee.

Over half of homeowners over 50 would not consider equity release (57%). When asked why, the misconceptions become even more clear. Many mentioned not wanting to leave their children in debt or with a difficult estate to deal with.

In addition, the research found that three-quarters of those who released equity say their overall happiness has improved as a result, with 40% saying releasing equity significantly improved their happiness.

Mark Screeton, CEO at SunLife, said: “Equity release offerings have changed a lot over the past few decades. Today’s offerings are well-regulated by the Financial Conduct Authority and often include product features promoted by the Equity Release Council to protect consumers.

“It’s great to see that the vast majority of those who have released equity feel happier in their lives as a result. Retirement should be a time to relax and spend your time however you choose, and for some people Equity Release can be a great way to unlock more opportunities in later life.”