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Older Homeowners in the North East Most Likely to Clear Debts with Equity Release

11 March 2019

Retired homeowners in the North East are the most likely to use housing equity to pay off credit cards and loans, new data from the UK’s leading independent equity release adviser Key reveals.
 
Around two out of five (39%) older homeowners in the North East are using some or all of the cash they receive from equity release plans to clear unsecured debts such as credit cards.  This is higher than the national average (31%) and significantly higher than those in Scotland (24%) who are the least likely in the UK to use their housing equity for this purpose.
 

Region Percentage of equity release customers clearing credit cards and loans
North East 39%
North West 35%
South East 35%
South West 32%
Yorkshire & The Humber 31%
East Anglia 29%
West Midlands 29%
London 28%
Wales 27%
East Midlands 26%
Scotland 24%
 
Average pay-outs from homes for equity release customers in the North East last year were £53,372 with £138.56 million of property wealth received by retired homeowners, Key’s figures show.
 
Around one in four (24%) used the money to pay off existing mortgages highlighting how debt repayments are a major drain on standards of living in retirement.
 
However, the most popular use of the money in the North East is for funding home and garden improvements with 56% re-investing some or all the money in their houses so that they can stay in their homes. Around 36% used the money to pay for holidays while 13% used some of their cash to help out family.
 
Will Hale, CEO at Key, said: “Debt is a major issue for people in retirement with many finding that they have finished work but haven’t cleared their debts or that they need to use credit to pay for unexpected expenses.  We also see some people who having climbed onto the housing ladder later than anticipated or taken out an interest-only mortgage and either need to repay a lump sum or make ongoing mortgage repayments into retirement.
 
“This can be extremely stressful but property wealth is making a major difference to standards of living in retirement with customers using the cash to repay debt, improve their homes and even go on holiday.  Good independent expert advice is key to ensuring that older homeowners receive the most benefit from their property wealth and use it in the most appropriate way for them and their families.”
 
The table below compares the North East with the rest of the UK
  NORTH EAST UK
TOTAL PROPERTY WEALTH RELEASED £74.789 million £3.600 billion
TOTAL PLAN SALES 1,438 47,081
AVERAGE PROPERTY WEALTH RELEASED £51,992 £76,473
HOW MANY SPENT ON THE HOME 58% 64%
HOW MANY PAID OFF DEBTS 39% 31%
HOW MANY SPENT ON HOLIDAYS 36% 33%
HOW MANY PAID OFF MORTGAGES 23% 22%
HOW MANY HELPED OUT FAMILY 13% 27%
HOW MANY ARE PAYING BILLS 10% 12%
HOW MANY SWITCHED FROM ANOTHER PLAN 5% 4%
HOW MANY ARE REDUCING IHT N/A 1%
 
Anyone looking to release equity from their home can get Key’s independent guide to equity release by calling 0800 531 6027 or visiting https://www.keyadvice.co.uk/equity-release/is-it-right-for-me
 
 
 
 

Page last updated: Wednesday 05 June 2019