According to a survey of equity release-qualified financial advisers carried out by Canada Life, 69% of advisers expect that homeowners currently retiring with higher levels of debt than before will be the second biggest driver of equity release demand next year, as they take action to pay it off.
This is more than double the percentage of advisers who chose this option in 2018 (31%).
Echoing this, Canada Life customer information for 2019 also found that 49% of equity release customers used the wealth in their homes to pay off residual mortgage debt, while 23% of customers used the home finance product to consolidate unsecured debts.
Alice Watson, head of marketing and communications at Canada Life, Home Finance, said: “It’s clear that advisers have a handle on the rising levels of debt amongst over-50s. It’s a positive sign for the industry that advisers expect consumers will turn to equity release to offer them improved financial security.
“With more people expected to use equity release to help manage their finances, the importance of financial advice is brought to the forefront. Using lifetime mortgages to reduce debt may not be the most appropriate solution for everyone. Getting quality, independent advice can help consumers make the right decision, based on their own individual needs.
“In 2019, we’ve seen more consumers perceive their wealth in a holistic manner, acknowledging the role that their property can play in their financial plans. However, there is more work to do – the industry must continue to show older homeowners how they could improve their retirement lifestyle by accessing the wealth stored in their home.”