This is a follow-up to my post “Equity Release Revisited” which prompted me to look into the subject again and start a new series of blogs on the subject. I first wrote about this in 2012 and then again in 2015. (You can find my earlier posts by clicking on Equity Release in the TAG CLOUD).
The latest reports in the press about the joys of Equity Release suggest that pensioners are drawing down £11 Million a day, against their housing asset. That’s a staggering £4 billion a year !!!!!!!
That’s a lot of Lamborghini’s. George Osbourne’s one time idea of what old people could spend their pension funds on. 🙂
In fact it would only buy about 13,000 Lamborghini’s, so a lot of pensioners would miss out unless they had a luxury car-sharing scheme. Still, it would be very interesting to see what 13,000 pensioners racing about in Lamborghini’s would look like. I expect it would raise a few eyebrows and attract more than a few speeding fines 🙂
Now coming back to Equity Release, the typical loan to value ratio of Equity Release is 30%. So these new petrol heads have effectively handed control of £12 billion of their wealth to a pack of avaricious insurance companies. I wonder if they’ll regret that decision if they subsequently require care and find that the loan companies won’t lend them any more money.
No doubt they will also offer to insure the Lamborghini’s too. Although I am certain that won’t be cheap either, they will probably want half of your newly acquired loan.