Reduction in housing benefits could increase equity release loans?

The government's decision to reduce housing benefits could lead to an increase in the number of people opting for equity release schemes.

In response to the government's announcement, the Citizen Advice Bureau recently cautioned cabinet minsters against the dangers of going ahead with the cuts without running a pilot scheme to properly gauge the effects beforehand.

The bureau warned that the proposed cuts could lead to people falling back on their rents, as well as increasing the levels of homelessness.

Citizens Advice housing policy officer Liz Phelps said: "Rent arrears and evictions are likely to rise sharply once the changes come into force, yet there is little consideration of the impact on local councils, whose homelessness services will be under enormous increased pressure, with reduced scope to find housing solutions in the private rented sector because of the cuts - and all this at a time when local authorities themselves will be facing budget cuts."

Last week, Andrea Rozario, director general of Safe Home Income Plans, pointed out that equity release could help fund care for the growing population of older people in the country.

Ashall Glover Financial Services specialists in equity release loans

Posted by Partick Ashall