Equity release is a popular financial product for people over the age of 50, but there are many misconceptions that can lead to poor decisions. A recent survey of over 1000 people in the UK found that 90% of respondents believed at least one myth about equity release.
One of the most common misconceptions is that equity release will reduce inheritance for the next generation. This is not true; equity release does not reduce the amount of inheritance that can be passed on. In fact, it can provide a way to increase the inheritance by releasing capital from the home to invest in other assets.
Another myth is that equity release is only available to homeowners. This is not true; there are products available for people who are renting or living in shared ownership properties.
A third myth is that equity release is only available to those who are in financial difficulty. While some people may use equity release as a way to manage their finances, it is also available to those who are looking to supplement their retirement income or make a large purchase.
A fourth myth is that equity release will reduce the value of the home. This is not true; equity release does not reduce the value of the home. In fact, it can be used to improve the home by releasing capital to make repairs or renovations.
Finally, some people believe that equity release is a risky product. This is not true; equity release products are regulated by the Financial Conduct Authority and have safeguards in place to protect customers.
Equity release can be a great way for people over 50 to supplement their retirement income or make a large purchase. However, it is important to be aware of the common misconceptions about equity release so that you can make an informed decision. If you are considering equity release, it is important to speak to a qualified financial adviser who can provide advice tailored to your individual circumstances.