Advisers have warned that equity release may not be the best option for some of their clients looking to boost their income in retirement.
Around £2.2bn worth of property wealth was released last year as the equity release market grew by over a third, but research from Bower Retirement showed that advisers recommend around one in 10 clients look for other sources of income.
Less than a quarter of clients are well informed about equity release when they first express an interest, and around 18 per cent of equity release clients have been rejected for mortgages, according to the survey.
Clients considering equity release were most worried about the impact on potential inheritance and upset family members, and voiced concerns about interest rates on the borrowing.
Average interest rates are currently around 5.7 per cent and have fallen by nearly 1 per cent over the past three years while the number of plans available has nearly trebled over the same period.
Andrea Rozario, chief corporate officer at Bower Retirement, said that while the equity release market is growing strongly but will never be right for everyone.
“Most clients are not well-informed about using property wealth before they start the process and need advisers with the skills and capability to explain their options thoroughly.
“Advisers need to fully understand all the alternatives while also being able to handle the emotional and family issues. There is a risk that some advisers are only offering equity release as an add-on to their main business and may not fully understand the options available.”
