Equity release 'being used by more pensioners to reduce mortgages'

Date:Tuesday 21st April 2009
Author: Susanna Kavka

A rising number of UK pensioners are using equity release as a way of reducing their mortgages, a firm has said.

According to Key Retirement Solutions, the number of people aged 65 and over who used the firm to release equity from their homes in order to cut down the size of their home loans rose by 38 per cent last year compared with 2007.

The company also suggested that people aged 70 and over had the greatest mortgage debts of all retirees.

It said that people in this demographic who used it for equity release had an average mortgage of £48,442.

This compared with people aged 65 to 69, who had average mortgages of £34,272.

Dean Mirfin, Key Retirement Solutions group director, said: "Whilst we expect that some of today's pensioners will have the need to have an outstanding mortgage, we are concerned at the potential scale of the problem."

Recently, Adrian Lowcock, senior investment adviser at Bestinvest, claimed that homeowners in the UK are increasingly prioritising reducing their mortgage debt, as opposed to trading up on the property ladder.