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Age UK launches Equity Release Advice Service

Published on 09 February 2011 02:00 PM

Homeowners don't use largest asset to boost post-retirement income

For some of those who are asset rich and cash poor, an equity release plan could provide an additional income which could help make their retirement more comfortable - yet over 90 percent (91%) of homeowners aged 60+ say that they would not consider the option.

  • Two thirds (66%) of people aged 60+ own their home outright and, of these, just over a third (34%) rely on a state pension as their main source of income
  • Age UK Enterprises launches a new equity release advice service in association with Just Retirement Solutions (JRS) that allows regular drawdowns as low as £5001. Latest research (2) from Age UK Enterprises, the commercial services arm of charity Age UK, reveals that 66 percent of those aged 60 and over own their homes outright yet of these just over a third (34%) of all those aged 60+ have only the state pension as their main source of income.

In the last year, over one in 20 (7%) of 60+ respondents had tried or considered ways of generating additional money to live on with around a third (37%) of these having gained work - with, specifically, around 1 in 8 (13%) taking on freelance work such as gardening or being a handyman.

Whilst not suitable for all, equity release could provide a useful source of income for some. Research found that of those homeowners in later life (60+) who would not consider releasing income from their home, 27 percent want to leave their property to a relative. A further 25 percent don't think equity release is appropriate for them while 17 percent did not trust Equity Release products.

Gordon Morris, Managing Director of Age UK Enterprises said: 'Many people reach retirement and realise that the state pension will not provide the comfortable lifestyle that they had hoped for. During their working lives, they will have worked hard to pay off a mortgage and it may be that when they retire, their home can be used to supplement a meagre pension.'

Gordon added: 'We have specifically developed the Age UK Equity Release Advice Service based on our in-depth understanding of the needs of those in later life. We know that just over a quarter of these home owners, who would not consider releasing income from their home, are not opting for equity release because they wish to leave their home to their family. We designed the Age UK Equity Release Advice Service to ensure customers are able to pass on some of the value of their home to family if they wish. The service can also allow people to release sums as low as £500 and includes advice to ensure that people only consider purchasing equity release if it is appropriate for them.'

The Age UK Equity Release Advice Service, provided by JRS, is a regulated no-obligation service. It has been designed so that large draw downs are not obligatory and customers can take out sums as small as £500 through the flexible cash plan. As part of the service, a state benefits assessment is provided to make sure that a customer is receiving all the benefits they are entitled to before considering equity release. The interest rate on the plan exclusively available to Age UK customers is currently 6.59% (4). Furthermore there is a guarantee that the customer can remain in their home for as long as they choose and move to another property providing the new property can act as acceptable security for a loan. All providers recommended by JRS have a no negative equity guarantee, so a customer will never owe more than their home is worth.

Customers who would like more information can call 0845 600 9275 or visit the website where a wealth of resources, including guides and information are available.

 - ENDS -

For further information, please contact Adam Smith or Imogen Dunn on 0207 360 7877 or email us.

  1. Age UK are offering a new Equity Release Advice Service working with Just Retirement Solutions (JRS),The service will provide full financial advice on all types of equity release schemes from a range of leading providers. JRS is fully regulated and authorised by the FSA. Their advisers will discuss the customer's circumstances and financial objectives to help make a recommendation on the right solution for them. JRS take pride in treating customers fairly, and strongly encourage customers to involve their family or a close friend in the decision-making process. Equity release is not right for everyone, and if it's not the right option their advisers will clearly state the reasons why and identify other options. If it is the right option, their advisers will draw up personal illustrations and guide the customer through the process. There is a guarantee that the customer can remain in their home for as long as they choose, the right to move to another property provided the new property can act as acceptable security for the loan. All their providers have a ‘no negative equity' guarantee, so that they never owe more than their home is worth
  2. All figures quoted are based on research conducted in January 2011 by TNS on behalf of Age UK Enterprises. Results are based on a sample size of 1,144 adults aged 55 and over living in Great Britain.
  3. The full basic state pension for a single person currently at £97.65 a week.
  4. Just Retirement Advice comes with no obligation. So if you don't proceed there's no change. But if you go ahead with the application, a low advice fee of £599 will be due, payable on completion. There are other fees associated with equity release which your advisor will talk you through.

Age UK provides a wide range on independent Information and Advice to help people in later life make the right choices about their money. To download a free Equity Release factsheet please visit the Information and Advice page or call 0800 169 6565.

Age UK

For media enquiries relating to Wales, Scotland and Northern Ireland please contact the appropriate national office: Age Scotland on 0131 668 8055, Age Cymru on 029 2043 1562 and Age NI on 028 9024 5729.

Age UK is the new force combining Age Concern and Help the Aged, dedicated to improving later life.

We provide free information, advice and support to over five million people; commercial products and services to over one million customers; and research and campaign on the issues that matter to people in later life. Our work focuses on five key areas: money matters, health and well being, home and care, work and training and leisure and lifestyle. We work with our national partners, Age Scotland, Age Cymru and Age NI (together the Age UK Family), our local Age UK partners in England and local Age Concerns. We also work internationally for people in later life as a member of the DEC and with our sister charity Help Age International.

Age UK is a charitable company limited by guarantee and registered in England (registered charity number 1128267 and company number 6825798). Age Concern England and Help the Aged (both registered charities), and their trading and other associated companies merged on the 1st April 2009. Together they have formed the Age UK Group ("we"). Charitable services are offered through Age UK and commercial products are offered by the Charity's trading companies, which donate their net profits to Age UK (the Charity).

Age UK Enterprises

To fund its charitable activities, Age UK needs a constant flow of independent income. It seeks to achieve this through a balance of traditional fund raising and trading activities. Age UK Enterprises Limited receives commission from Just Retirement Solutions Limited of up to 1.5% of the amount advanced under each equity release plan sold, plus a contribution towards marketing support. Local trading Age Concerns / Age UKs receive up to 30% of the commission that Age UK Enterprises Limited receives for each equity release plan sold (i.e. up to 0.45% of the amount advanced). Surplus net profits raised by Age UK Enterprises Limited from equity release commission are donated to Age UK.

The trading activities, through Age UK Enterprises enable it to meet the needs of older people, through products specifically designed to meet these needs; quality products such as general insurance and energy Services. Age UK Enterprises is the commercial services arm of Age UK. Age UK Enterprises incorporates: Age UK Energy, Age UK Insurance Services and Age UK Guaranteed Funeral Plans. Log on to the products page for more information.

Age UK Motor Insurance is now proudly on Which? Magazine's Recommended Providers List of car insurers. Which? Magazine analyse the whole UK car insurance market to find out which brands offer the best policies. Instead of picking Best Buys based on specific scenarios (that are only relevant in specific cases), the experts at Which? magazine focus on the quality of policies. Age UK Enterprises is part of the Social Enterprise Coalition; an organisation that represents a wide range of social enterprises with the overarching aim of working in partnership for the creation of effective sector products, services and knowledge-sharing networks to help stimulate and encourage growth, development and sustainability of social enterprises in England.

Age UK Enterprises scooped up the ‘Customer Care Award' at the prestigious 2010 British Insurance Awards. The judges singled out Age UK Enterprises for its exceptional customer service which is provided by Ageas Insurance Ltd, as well as for glowing customer testimonials with a ‘world-class' customer satisfaction score of 85 per cent, and 89 per cent of customers saying that they would recommend Age UK Enterprises/Ageas (Insurance UK).

Age UK Enterprises Limited is authorised and regulated by the Financial Services Authority for insurance mediation (311438). Age UK Enterprises Limited is registered in England and Wales No. 3156159, registered office: Astral House, 1268 London Road, London SW16 4ER. VAT Number: 710 3843 66. Age UK Enterprises Limited is a wholly owned subsidiary of Age UK (registered charity No. 1128267 and registered company No. 06825798) and donates its net profits to Age UK. Age UK England (charity number 261794) has merged with Help the Aged (charity number 272786) to form Age UK, a charitable company limited by guarantee and registered in England: registered office address 207-221 Pentonville Road, London, N1 9UZ, company number 6825798, registered charity number 1128267.

Age UK Enterprises is based at 4th floor, 207 - 221, Pentonville Road, London, N1 9UZ.

Just Retirement

Just Retirement (Holdings) plc was founded in 2004 and listed on the Alternative Investment Market (AIM) in December 2006. In November 2009, Just Retirement was acquired for £228m by Avalon Acquisitions Limited, a company backed by funds advised by Permira. The Group provides two products to those at or in retirement; enhanced annuities and equity release mortgages. Enhanced Annuities Annuities are contracts offered by the Group to people at retirement (annuitants) under which the Group undertakes to make a series of payments in the future in return for the immediate payment of a lump sum to the Group by the annuitant. This lump sum is provided by the annuitant's pension fund. The level of future payments is set according to the rates of return available within the capital markets and the expected longevity of the annuitant. In 2009, the total value of the annuity market in the UK was £10.8bn (source: Association of British Insurers "ABI").

Enhanced annuities are offered to people at retirement that may not live as long as average due to lifestyle (smoking, for example) or illness. Given the impact of these factors on longevity, it is possible for providers such as Just Retirement to offer "enhanced" annuity rates to those qualifying. In 2009, the total annual value of the enhanced annuity market in the UK was £1.8bn.

Just Retirement does not provide pension fund management. As such, it can only offer annuity contracts to those utilising the Open Market Option (OMO). OMO allows pension fund holders to "shop around" for an annuity rather than take that provided by the incumbent pension fund provider. At the end of 2009, the total value of annuities bought during the year using the OMO was £5.4bn.(source: Association of British Insurers "ABI") Equity Release Mortgages Equity release mortgages are advances made to homeowners in or at retirement. They fall into two main types: lifetime and reversion.

Just Retirement only offers lifetime mortgages. This allows the homeowner to borrow a certain amount of capital against the value of their house. Although this advance carries a rate of interest, this is capitalised over the life of the mortgage. The loan, together with the accumulated interest, is repaid at the end of the mortgage. The equity release market is monitored by the industry body, Safe Home Income Plans (SHIP) and advice within the market is regulated by the FSA. SHIP recently announced that the total value of the UK equity release market in 2009 was approximately £950m.

Last updated: Oct 06 2017

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