When you are young, it is easy to think that owning a home is a fantastic investment for the future. Paying money so that you won your home can feel really satisfying but when you get older you may not feel the same way. It can be great living rent free, but you will have a lot of money maybe tens or even hundreds of thousands tied up in a property. You may want to continue living there, but want some of the money and this is where equity release comes in.
There are lots of reasons why we may need some extra money when we are older. We may need it because we want to have a nice holiday, buy some new things or even give it to our family. Some people like the idea of passing their inheritance on to their children early, but they can only do this by releasing some equity in their home. It may even be that you just want to have some money in the bank so that you have something to fall back on if necessary, but you do not want to sell your house and downsize as you are happy, have good memories and are in a good location.
Another reason why someone might need to do this, is if they have not made a good enough pension provision. The cost of living has gone up more than anyone predicted and it could be that the pension is just not enough to cover it. However, once retired, it can be difficult to find a way of bringing in more income and equity release could be the answer.
Some people also feel that their money is wasted tied up in their property as they would much rather be able to use the money. They do not mind that it will mean there is no property to pass on to someone after they no longer need it, they might rather be able to use the money themselves. It may even be that they have no dependents and so have no one to pass it on to.
So there could be all sorts of reasons why someone might decide to release equity in their home. It is something which is a fairly new idea and it is likely that more and more people will be doing it as the idea gets more widely excepted and people has less good pension provision.