Consumers are concerned and confused about equity release, claims SHIP

New consumer research launched on June 15 during parliamentary afternoon tea at the House of Lords revealed that just 29% of Brits feel prepared for retirement.

While the majority of consumers looked to take responsibility for their own retirement finances, major financial decisions caused anxiety (34%) and worry (31%). Around 26% said they felt “confused” and 22% felt “overwhelmed” about the issue.

This theme was particularly relevant to the equity release market, as 43% of consumers said they simply didn’t know if they would consider using this type of product to help finance their retirement. The key issue here was lack of understanding: 30% said they did not know enough about the equity release process, while 29% said they wanted to leave their homes as an inheritance - not realising that many equity release plans offer this as an option.

Around 23% said they didn’t want to go into debt and 8% didn’t believe the market was regulated.

Commenting on these findings, Andrea Rozario, director general of equity release body Safe Home Income Plans (SHIP), said: “While it is good news that consumers are stepping up to the challenge of preparing for their own retirement, others look to bodies such as the government and employers to take the responsibility.

“One of the major stumbling blocks appears to be the fact that making major financial decisions causes worry, anxiety and confusion.

“Indeed, almost half of consumers don’t know whether they will use equity release to help finance their retirement - citing misconceptions and inaccuracies as barriers.

“With just 13% of consumers saying they have a plan for their retirement finances which they stick to this clearly highlights the need to provide people with education and support so that they are able to make informed decisions about their future.”