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More people are turning to equity release to cover debts

Equity-release advisers and product providers have warned of a worrying increase in elderly people using equity release as a primary debt solution.

The warning comes after a recent study by Key Retirement Solutions which shows that more than one in three over-55s have outstanding unsecured debts averaging over £11,000 or a collective debt of £66bn.

The report reveals that the over-70s have total unsecured debt of over £22bn.

KRS business development director Dean Mirfin says the growing debt problem has led to homeowners using equity-release products as a means to manage debts.

He says: “We have seen a rise in people using our products to solve debt problems but the debts are getting bigger and that is a bigger concern for us.”

Retirement Plus managing director Duncan Young says there has been a definite rise in elderly debt, with one recent applicant admitting to having 17 credit cards.

He says: “We do get a reasonable amount of debt refinance business now. It is scary to see how much the elderly are in the red.”

Mirfin says there could be a rise in equity-release provi- ders with the main remit of a debt solution.

He says: “I do not see why there would not be equity-release debt specialists in the future.

“Many of our clients are not eligible for other debt recovery products such as unsecured loans so equity release is fast becoming another debt-solving opt- ion for older people.”

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