£3.9bn borrowed in equity release boom

SOME £11m a day was borrowed by over-55s against the value of their homes last year.

In an equity release boom, 44,000 older homeowners borrowed £3.9bn in 2018, according to the Equity Release Council trade body, up from 33,000 accessing £3.1bn in 2017.

The figures suggest homeowners are turning to their properties for cash as their pensions fail to cover the cost of retirement and social care.

Equity release allows homeowners over the age of 55 to borrow money against the value of their property. The cash is repaid – along with interest – when the borrower dies or goes into long-term care.

The product’s soaring popularity has drawn in massive investment firms such as Legal & General, whose boss Nigel Wilson believes industry sales will soon top £20bn a year.

Critics have warned borrowers may not realise the long-term impact of releasing money on their children’s inheritance.