Many people now have more equity in their property than they have ever had before due to massive increases in house prices in the last ten years. Some want to release money to support pension provision or for debt consolidation or home improvements without being forced to move house. You may have heard of these ‘equity release scheme’ but been scared off by recent bad press surrounding these. It is estimated that 56% of the UK population do not know what equity release is. Let’s have a closer look to help you decide.

Equity release plans are designed to release equity in your property by selling part or your entire home to the equity release firm in return for a lump sum and/or regular income or drawdown facility.  On your death the equity release firm will sell your property to reclaim the money plus interest and a profit for themselves. This should be avoided if you plan to leave your home as part of your inheritance.

There is also a danger with those now relying solely on these plans for future pension provision; however its popularity continues to rise. To explain; One in ten people are planning to rely on equity in their home to finance their retirement it has been claimed. According to ‘In retirement services’; people are planning to use the equity in their home to finance their life after which they retire. The firm has warned that in order to secure a minimum pension of £20,000 from a family home at the age of 65, the property would have to be worth in excess of £1 million at current prices. This raises the problem that there is an estimated 89,000 properties in that value band, but around three million people are planning to fund their retirement in this way. The half year results of Safe Home Equity Plans (SHIPS) have shown that equity release sales rose 16% in quarter two of 2007. As strong as house price growth continued to rise in the first half of 2007, the demand for equity release plans has also risen by about a fifth. The growing need for equity release seems to have derived from poor pension performance and UK trends and demographics.

The FSA (Financial Services Authority) has labeled the equity release sector of the financial industry as being ‘high risk’. Of course such stringent regulation demands a high standard of advice from intermediaries. They have to study and pass a bespoke equity release examination and follow a prescribed process. However, four new equity release lenders are due to enter the market shortly leaving customers at greater risk of dealing with a wealth of inexperience.

Another, less dramatic option is to consider a secured loan. Many secured loan lenders now will lend to older people some without any age limits. They will lend to the self employed with no proof of income and even to those with bad credit. To speak to an expert in secured loans who can talk you through all the options that are available to you visit www.easyukloans.co.uk The adviser are all very experienced and are highly trained to provide you with all the information about each secured loan product so that you can make an informed decision without any obligation or pressure. For piece of mind that you are being directed to the very best secured loan independent master broker visit www.easyukloans.co.uk  now.

December 2007