The Pensions Policy Institute says research into commonly available equity release schemes shows consumers should not bank on their homes to bail them out of poverty in retirement because of the poor rates of return offered.
Instead, the PPI says people should rely primarily on long-term dedicated pensions savings, with equity release only as a complementary step to funding retirement. PPI researchers scoured websites of equity release scheme providers to come up with the finding that just 20% of a property’s value is released by such schemes for the average 65-year-old applicant. Additionally, house price indices hide large variations in house values amongst mean figures: most homes are worth less than £130,000 according to Office of the Deputy Prime Minister figures quoted by the PPI. To gain £100 p...
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