Equity Release Research Key Issues

This is a follow-up to my post “Equity Release Revisited” which prompted me to look into the subject again.   I first wrote blogs about this subject in 2012 and then again in 2015.    (You can find my earlier posts by clicking on Equity Release in the TAG CLOUD).

Where on earth do you start with this ?   It should be simple and straightforward.    There are occasional adverts on the tele, but they appear and disappear so quickly that you can’t remember any contacts from them, so that’s no good.   I do recall an advert a while ago.   What was that nice man Michael Parkinson on about ?    Oh no, that was funeral plans.

Maybe there will be something in the papers at the weekend.  I flipped through every page of the Sunday papers, especially all the ads about sit-in showers and mobility scooters, but, I couldn’t find a thing.

Of course, there will be everything you would ever want to know on the internet, but, that remains a mystery to the majority of older elderly people.    Yet they are the very people who might most need equity release.

Perhaps I could start with that helpful little brochure that came through the post the other day.    I don’t remember sending for it, but, I suppose I must have ticked a box somewhere.   It’s called “RetireWise” from Key, whoever they are.    It looks like a magazine, with quizzes and prizes, but, I think it is no more than an advert for equity release.

Sure enough when I open it, I can see it is a 28-page advert for equity release, plus a few plugs for stair lifts and travel insurance for old people and cosy wide fitting shoes and ready meals and wills.   That’s obviously what life’s all about when you start thinking about equity release.

Then there are lots of reassuring words about equity release.  Key words like “more choice”, “more freedom”, “SWEET FREEDOM”, “the best of times” and last but not least “safeguarding your future”.   In other words, if you don’t opt for equity release, who knows what will happen to you.

There is a problem here however.  Having read all 28-pages I can’t really find any facts.   I guess that’s why at the bottom of every page is a footnote suggesting that you “ book a free consultation with your local adviser today”.    Not a lot of magazines offer this excellent service of a home visit.   I don’t remember this home visiting service coming with the Beano when I was a child, nor with Architects Journal when I was training and could have done with some occasional advice.   It doesn’t even come in Amateur Gardener when a bit of help around the garden would be most welcome.

I did find one set of figures, which were about fees for this advice, if you decide to go ahead.    It’s free —- “There are no up front fees”, so the brochure claims.  Except ….. you do pay 1.99% of the loan, but, there is a minimum fee of £1,499.  This means you have to borrow £75,000 or more for the fee to be 1.99%.   On lower loans the percentage will be much higher, so if you were only to borrow £15,000 the fee would be 10% !

It is little stings in the tail like this that make me sceptical about equity release.   It is not a lie, but, it doesn’t tell the complete picture.

More research is needed and I’ll write about it again in a few weeks ………..

This entry was posted in ELDERLY MARKET, Grey Products and tagged . Bookmark the permalink.

One Response to Equity Release Research Key Issues

  1. David Freeman says:

    Well, well! My personal and friendly bank does not offer a plan to offer “equity release”, as one may proport too! However it is very kindly offering us an overdraft, in excessive amounts such that the repayments are more than our combined pensions, for that unexpected expenditure for at 75 years of age on care and support or a lesser amount for that holiday or cruise of a lifetime? Wonderful? However being a realist one is surrending both ones savings and, if one is fortunate, the bank require i am sure a signature to claim [first right against ones estate and equity in any assets one may possess?] . When that signature is wet on the paper there is no talk of a wonderful retirement home or village in which one can live at the banks expense, other than a victorian debtors prison, or homeless on the streets, to spend ones last days on this earth!
    Opportunit is a wonerfull thing and life is marvellous, however old age can be a burden? And just a blog away on this site is the in depth discussion of eaupheania which is another demon and devil to contend with? Thre are no easy solutions, one must rest easy with good advice from which ever direction that may come from! But alas not my bank just yet???

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