The news follows a report earlier this month from the House of Lords, called Ready for Ageing?, which cited a real need for the government and industry to do more to help bridge the gap between expectation and reality, and to help older people with forward planning for retirement.
Nigel Waterson, chairman of the Equity Release Council, said the ONS stats demonstrate that “decisive action” is needed to “overcome the knowledge and policy vacuum that continues to linger.
“Equity release can help to ensure a comfortable and stress-free older age; the recent House of Lords report suggested as much and called on the government and industry to work together to boost the growing confidence in equity release.”
However, he said that while no single department brings together all the aspects of equity release, the ERC is working with the department of health, the treasury, the department for work and pensions and local governments to help provide a “joined-up approach”.
A survey of advisers’ views on equity release, carried out by provider Bridgewater, found that 25 per cent of advisers felt clients misunderstood what they would own, while 18 per cent had no knowledge of what equity release was.
Rob Simpson, managing director for Coventry-based SimpsonFS, said: “If you were to say to a younger person ‘It’s time you start saving in case you need to go into a care home’, this would not turn them onto saving. But people need to consider ways to fund their care. We are seeing attitudes to equity release changing, and it has been useful for some people. For some of our more wealthy clients, they are remortgaging to release cash to help their children or grandchildren onto the property ladder. However, for the average client, we have found that the rates of interest on an equity release product can be so much higher than that of a mortgage product, so it is not always affordable for some people.”