Equity release set to increase throughout recession
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by Kay Mitchell
According to Norwich Union, the equity release industry is set to surge as a result of the economic downturn.
Equity release is a scheme designed to allow homeowners to release cash from the value of their property.
Retirees, in particular, are set to release the equity from their homes as a lack of retirement fund might become a problem, believes the organisation.
Norwich Union figures show that in 2007, the market was worth Â£1.2 billion and the insurer is predicting that the market will grow to Â£2.4 billion by 2013.
While equity release is not the right option for everyone, Anthony Rafferty of Norwich Union said the economic turmoil has been hugely detrimental to many parts of the UK economy, it may actually stimulate growth in the equity release market.
It could be one of the few or only sectors to benefit from the recession.
In 2013, we predict the equity release market will help more than 115,617 over 65s by injecting Â£2.4 billion pounds into their pre or post retirement income, said Mr Rafferty.
This phenomenal growth will also be stimulated by high street banks and building societies entering into referral deals, the general lack of pension provision and the Government’s push for self-funded retirements, he concluded.
However, a report earlier this year from consumer group, Which?, warned those considering equity release should do so as a last resort.
Which? also advises retirees struggling with finances should investigate their eligibility for state benefits or grants to help with the cost of living.
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