Equity release schemes proving more popular
September 1, 2008
Over recent months equity release schemes have hit the financial headlines on a number of occasions, with many industry officials and campaign groups slating these schemes, giving them a poor reputation. Despite being at the centre of controversy, however, it appears that equity release schemes are increasing in popularity, and according to recent reports both the quality and the service associated with equity release schemes has been improving.
A recent survey was carried out by Norwich Union, and according to the results of the survey, which involved polling around 1600 people aged between 50 and 56 years, these equity release schemes are becoming particularly popular amongst consumers that are coming close to retirement age. The results of the survey showed that one in ten people within this age group would be interested in looking into equity release schemes. However, of those that had already retired only one in twenty expressed an interest in equity release.
Experts state that the information and quality of service is improving, helping to make things clearer for customers that may be considering one of these schemes. One equity release customer stated: ‘I was afraid of the financial bits, but my neighbour sat in on one of the meetings. It told me how much I could draw down and I’ve taken about a third of an agreed maximum.’ She added: ‘The compound interest rate is the nasty bit. The man from the Pru worked out that on average I’m likely to live another 27 years. He then told me how much I’d owe, based on the interest rate, if I borrowed varying amounts over various times.’
An official that works in the equity release sector said: ‘The market today is very different. The paperwork given to customers before they sign goes so much further. It really shows what they’re getting into.’
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