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Equity release used to pay off debts |
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18 August 2008 |
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 The number of older people who are looking at releasing equity from their homes has increased sharply in recent months, as pensioners face higher-than-average inflation and are struggling to make ends meet.
Older homeowners have been building up credit card debt and are using equity release to pay it off, Dean Mirfin of Key Retirement Solutions, an independent equity release specialist, told the Daily Telegraph. More than one in three people over the age of 55 have outstanding unsecured debts.
The total amount of equity released by retired people reached £390 million in the three months to June, which was 13% up on the same period last year.
Equity release, either in the shape of lifetime mortgages or home reversion schemes, can be an attractive option to hard-pressed pensioners. The Financial Services Authority warns, however, that "equity release schemes can be helpful, but they are not suitable for everyone".
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