Just 19% would seek out advice on equity release

Its survey found that 81% aged 55 or over feel they could take out an equity release plan without the help of a financial adviser.

This includes over a quarter of respondents (29%) who would not trust an adviser and 8% who thought advice would be too expensive, while 44% thought they could handle it on their own.

This is despite it being a regulatory requirement that customers get financial advice in order to take out equity release as only FCA regulated financial advisers can sell equity release plans. 

One of the main factors that deterred consumers from taking out an equity release plan was the effect it would have on inheritance, but many have yet to mention this to those who could be affected.

Over a third (39%) are deterred from taking up an equity release plan due to the impact on inheritance and 30% are deterred by the interest rates on offer.

Rachel Springall, finance expert at Moneyfacts, said: “The idea of taking out an equity release plan has clearly crossed the minds of many consumers, but what is worrying is that most of our survey respondents felt they could go through the whole process without seeking advice. This could be an expensive mistake down the line if consumers choose the wrong deal.

“More than half of consumers (52%) were adamant they would not use equity release to fund their retirement, which may mean they are sufficiently prepared for later life. At this moment, it seems that equity release is an option and not a necessity, as a third of respondents (34%) would only use it if they had no other choice.

“Equity release won’t be right for everyone, so it’s positive to see that most of our respondents have considered the impact on their children or dependants’ inheritance. However, one area that could see improvement is striking up a conversation, as almost half of those asked (48%) have not discussed the topic at all.

“It’s important that consumers take the time to carefully think about equity release and discuss it with anyone who could be affected, which is why it’s good that these responses shed a light on consumers’ attitudes toward such a plan. Thankfully, equity release is being taken seriously and is not seen as a quick fix.

“Although some consumers may be set up comfortably for their retirement, not everyone will be in the same boat. Some retirees with insufficient savings might feel that they should release equity from their home because they are equity rich but cash poor."