Equity release expert criticises govt initiative

A new initiative backed by housing minister Grant Shapps has been criticised as it pressurises the elderly to move into sheltered accommodation.

Director-general of Safe Home Income Plans Andrea Rozario claimed the idea of encouraging older residents to downsize into rented accommodation and let out their property is flawed.

In an interview with the FT Adviser, she explained how the question of whether this system is a viable option is "doubtful", as it will involve high costs and relies on elderly individuals agreeing to move out of their home.

Instead, Ms Rozario suggested older people should be able to downsize on their own terms and consider other ways of freeing up funds.

"Alternative options such as equity release will boost their retirement income, while enabling them to remain in their home," the expert stated.

It was noted that many older property owners are likely to have emotional ties to their homes and so sheltered housing would not be an appealing choice.

Ashall Glover Financial Services are equity release specialists

Posted by Patrick Ashall