It is a big risk to do this. If you are not yet near retirement age and have a mortgage, then you may think that when you do retire you will be able to release some equity in your house and that will give you an income or lump sum that will pay for your living expenses during retirement. This sounds like a great idea in theory, but it is a huge risk to take.
Firstly, there is no guarantee that a financial institution would be interested in your house. They may decide that they do not want to invest in your property and so you may not be able to get the money from anyone.
The way that banks and other financial institutions work changes over time. It is very possible that in the future they may decide not to offer this sort of scheme. They are fairly new at the moment and they have probably not properly tested them to see how profitable they are. This means that they may decide to withdraw them in the future.
Banks are also wary to lend money at the moment. Although they are being pressurised to lend more, there is no guarantee that they actually will and so there could be problems in the future with getting hold of money from banks.
There is also talk of reducing bonuses from the heads of banks. This could mean that the management structure changes because some people may not be prepared to work for the company if they do not get paid so much. This could mean that a different generation of managers come in and they may change the way that the banks work and they may not lend in the same way.
None of us have a crystal ball and so we cannot predict the future. This means that it is a good idea to minimise the risk and plan well. At the moment it seems like pensions will be the best way to get an income for the future and so this is what you should be using for this purpose.
You should therefore not rely on using this sort of scheme instead of having a pension. Pensions are designed specifically to give you an income through your retirement and they should be the only product you use for this purpose.