New research from Safe Home Income Plans (SHIP) has found a lack of understanding of the mechanics of equity release among consumers. The research* found a worrying number of myths about equity release are still ingrained in consumer thinking. However, despite these misconceptions people have not ruled out equity release, with 49% saying equity release should be explored as a retirement planning option and one in five (20%) saying they intend to use equity release products in the future. The list below shows the most common myths about equity release as revealed by the research:

• Myth 1 You risk losing your home (69% of UK consumers believe this) Truth You can remain in your property for life provided the property remains your main residence
• Myth 2 You won’t be able to leave an inheritance (67%) Truth When you die or move into long-term care, your home is sold and the money is used to pay off the loan. Anything leftover goes to your beneficiaries
• Myth 3 You won’t be able to move home (52%) Truth You have the right to move your plan to another suitable property without any financial penalty
• Myth 4  Equity release is unsafe and unregulated (47%) Truth As regulated companies, all SHIP members must abide by a strict complaints procedure to satisfy the Financial Services Authority
• Myth 5 Your children will have to repay the loan themselves (43%) Truth You will never owe more than the value of your home and no debt will ever be left to the estate

Paul Cowdery, Equity Release specialist comments: "All this emphasises is that it is critical to have expert financial and legal advice when making decisions about equity release and not rely on rumour. Whether it is the right thing for you needs to be considered carefully, but in the appropriate circumstances equity release can provide just the right tool to meet your requirements."

If you require assistance regarding equity release, please contact Paul Cowdery. We do not provide financial advice but can refer you to a specialist adviser.

*Source: Barry Smith of Equity Advice