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Elderly use equity to boost pensions

Homeowners released 1.5bn of equity out of their homes to boost their pensions last year, and more would consider doing so if the process were less complicated.

Around 100,000 retired homeowners released nearly 4bn in equity out of their homes in 2004 and 39 per ent of that total went towards supplementing pensions, according to Economic Lifestyle & TNS who interviewed 683 homeowners.

Around 904,000 people over 65 intend to release equity from their home over the next three years.

The research reveals that a more straightforward equity-release process with greater options would make 300,000 retired people to go into equity release more likely to use the product between now and 2007. This would release an estimated further 11.41bn from their homes.

Huge deficits in company pensions suggests that even more retired homeowners will be looking to release some of the capital tied up in their homes to enhance their pensions.

Economic Lifestyle managing director Mark Neal says: “About one in five pensioners live below the poverty line and, with growing pressure on pensions, more people could fall into this cat- egory. With more than 1 trillion tied up in homes bel- onging to people aged 65 and over, many more will look to release some of this capital to improve their standard of living.”

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