People should be given more help to release equity from their homes as a means to provide additional income in later life, a new white paper recommends.

The Equity Release Council’s paper - Unlocking the potential: the future of equity release - outlines how government policy can help equity release meet the challenges of an ageing society.

It shows how housing wealth can provide a source of income in later life for many people, taking some of the burden away from the government in supporting the UK’s ageing population.

The paper calls for HM Treasury to lead the way on creating new policies to cover this area.

It also suggests new policies that could help people meet their retirement needs, and how to change current regulation so it no longer hinders the release of equity.

Recommendations

There are 7 specific recommendations in the paper:

1. Ageing society: more attention should be given to the role equity release plays in addressing the challenges of an ageing society so people can use their housing wealth to improve their income in retirement, when appropriate.

2. Pension Wise advice: the Pension Wise service should include advice on accessing housing wealth.

3. Home care: more investigation into how equity release can help people pay for home care by giving them the funds to live at home for longer.

4. Support for councils: the government should work with local authorities and other stakeholders to help provide advice on financing care services through equity release.

5. Case studies: more case studies should be produced showing best practice on care funding. This would complement current guidance on the implementation of the Care Act.

6. Financial Advice Market Review: use this review as a way to allow people approaching their retirement to access independent financial advice on things like retirement funding, paying for care, home adaptations and leaving money to children and grandchildren.

7. Financial Conduct Authority review: make sure this review of the equity release market considers the impact of the regulatory framework and other barriers to increasing the size of the market

A growing sector

The equity release sector is growing fast and is predicted to become more popular in the coming years as older customers face more challenges accessing mortgages and care costs rise, says Nigel Waterson, Chairman of the Council.

There are also a number of people aged over 55 who still use their equity to fund home improvements, help family members or for travel, he adds.

He is calling for the government and regulators to encourage responsible equity release.