From The BBC:
Pensioners should only consider unlocking equity from their home as a last resort, a UK consumer group says.
Equity release schemes could be expensive, inflexible and leave people with little equity, according to Which?
And any money people released from their property could also affect the level of means-tested benefits which they were entitled to, Which? adds.
Equity release allows retired homeowners to obtain money from their property without having to move out.
People can be given a lump sum or regular payments in return for taking out a mortgage on their home, which does not have to be repaid until they die or sell their property. Interest is added to the amount owed until such time as a payment is made.
Alternatively, people who own their home outright can sell a portion of their property to a home reversion company.
But Which? is warning that problems could arise if the borrower’s circumstances change.
An individual who wanted to move into sheltered housing or a retirement…