Equity release schemes used to have a bad image as they were related to those who did not put enough money away for their golden years, forcing them to use assets, like property, in order to continue living according to the standard which they were accustomed to. This was often seen as selfish and as a form of ‘robbing’ their children and future generations of their inheritance (which those in the younger age groups believe is rightly theirs, regardless of the circumstances).
With the Internet being widely available (to the point where every First World and numerous Third World homes have Internet access at home) it has become easier for consumers to do research in their own time without having an adviser there with them the whole time. This is appealing for a lot of consumers because advisers are often seen as glorified salesmen desperate to make another sale.
Lately however, equity schemes have become increasingly popular and have got rid of their negative image due to a massive clean-up by the industry over the last decade. Apart from a concerted effort that was made by those in the industry to clean up the image of equity schemes, one of the main reasons Equity Release schemes have risen in popularity over the last ten years is due to the rise of the Internet. A lot of people these days have access to the Internet.
Another reason the Internet has done equity release schemes such a lot of good is because there are online forums where consumers can freely discuss their experience of a particular product – a lot like neighbours do over the fence or friends do during dinner. The only difference is that now consumers have a lot more ‘friends’ to talk to. There is so much information and Internet forums. Since the experiences of consumers using equity release schemes has mostly been positive it makes sense that there will be a lot of positive information around these schemes online.
While the Internet has been helpful to increasing interest in equity schemes, it should be mentioned that not all information is accurate. In this same decade a plethora of articles on various sites have hit the web and some are written by inexperienced writers. It makes it difficult to cull through everything being said, which is why Browsers have changed in the last decade too. Many companies are penalised for improper works online, which helps ensure the information you find is accurate, verified, and above all trustworthy.
This change to how the Internet is utilised has certainly increased the interest many have in equity release. You can now search with confidence that the information pulled up is from an expert with a hand in the market. Many of these same articles help to debunk the myths that the previous versions helped cultivate about home reversion and lifetime mortgages.
When you consider the rise of equity schemes in popularity particularly lifetime mortgages, you need to know they are not without disadvantages. Every product or service ever created has drawbacks. It is what your situation will mean with regards to those disadvantages. A person without disposable income is most likely not going to need a lifetime mortgage; however, for a special holiday or funds for an emergency a release of equity can help. In this situation the disposable income can be used to pay the interest on a lifetime mortgage. This would be through the interest only lifetime mortgage option. The principle remains outstanding, but the interest does not accrue.
A person without disposable income might find the drawdown option beneficial since they take out only what is necessary. The funds drawn out of the account are the only ones that will accrue interest. Equity release can be used as a means to protect against emergency situations when a pension or retirement account is unable to cover it.
Each person will have their own situation with regards to extra funds. It is best to consider your situation, what is said in the forums, and then make a choice as to whether the popularity of these schemes is due to desirable qualities.
Finally, given the recent global economic downturn, the elderly are no longer expected to take care of the young as much as they were previously as everyone is struggling to stay afloat. Many households have combined generations now to account for the troubling income situation. Using equity release is just another way to ensure a family is well cared for, especially as an elderly person reaches the age of more care.