Marvin OnumonuResearch from Canada Life found equity release is still largely missing from retirement planning conversations, despite property making up a big part of household wealth.
Among homeowners who spoke to a financial adviser about retirement, just 7% were offered equity release without prompting.
Only 6% asked about it themselves, and 76% said they didn’t discuss equity release at all.
Less than half of homeowners felt confident their savings and income would last through retirement.
Property accounts for 40% of household wealth in the UK, so ways to access this money could help more people feel secure in later life.
Additionally, the research found 73% of homeowners had heard of equity release, but most still didn’t fully understand it.
67% did not know you could pass your home onto your children after releasing equity, and 63% did not know if you could move house after doing so.
Most homeowners, 82%, did not know about the No Negative Equity Guarantee.
42% thought you could end up owing more than your house is worth, and 40% did not know if that was true or false.
Pete Maddern, managing director, retirement at Canada Life, said: “As people live longer and many individuals find their pension savings falling short, unlocking money tied up in property to supplement pension income is likely to become an increasingly important aspect of retirement planning.
“Furthermore, with unspent pensions set to be included in inheritance tax calculations from 2027, more individuals will be seeking flexible estate planning strategies.
“Equity release can play a key role in enabling wealth to be passed to the next generation and in mitigating potential inheritance tax liabilities.”
Maddern added: “It’s encouraging to see the progress the FCA has made in recent months to explore how the later life lending sector and advice framework should evolve.
“While equity release will not be right for everyone, these developments have the potential to improve consumer understanding and awareness of later life lending, and to enable advisers to have more holistic conversations with their clients about whether equity release could help them achieve their later life and retirement goals.”
