"Those at the younger end of the scale are aware that record-low interest rates make equity release a more viable solution than ever before."
A rising number of equity release plans allowing interest and capital repayments is attracting more customers between 55 and 60 years old, according to research from Age Partnership.
Five years ago only a handful of lenders offered the option of making repayments and these were limited at a maximum of four per year, with the minimum for each payment set at £500.
Age Partnership's data shows that, over the last four years, there has been a 330% growth in the number of 55 year-olds seeking advice. This compares to a 67% growth for 65 year-olds and a 118% rise for 75 year-olds during the same time period.
Statistics from Pure Retirement show that since the option of making regular monthly repayments became available in Jan 2019, 12% of 55 to 59 year-olds are choosing to make regular repayments. This compares to 9% for clients aged 69 to 74.
Andrew Morris, senior equity release adviser at Age Partnership, said: “Clients that I’m speaking to are more informed about equity release than ever before. Those at the younger end of the scale are aware that record-low interest rates make equity release a more viable solution than ever before. Once we then add in the option of making repayments of up to 15% of the original loan amount per annum, equity release then provides a later life lending solution that allows clients to reduce the impact on their estate.
“Making repayments isn’t just an option for 55 to 60 year-olds, it’s something that we should be encouraging all clients to consider. Even if it isn’t something they can take up at the present time, the option of having this facility will mean that if their circumstances change they could begin to make payments in the future.
“The repayments can be a fixed monthly amount, which can help borrowers with their budgeting. Alternatively, clients can choose to make ad-hoc payments as and when they can afford them. This flexibility means that equity release can now help people in a wider range of circumstances.”