Tuesday 13th of October 2009
More than one in three older people who unlocked equity in their home during the last quarter used the money to pay off credit card debts, debts which may be better dealt with by an individual voluntary arrangement (IVA).
According to equity release group Key Retirement Solutions, 36 per cent of retired people borrowed money against their home to repay unsecured loans, reports the Press Association.
The number was more than 25 per cent up on the previous quarter of the year.
And the amount of equity unlocked, £214 million, was 13 per cent up.
However, some people may want to seek IVA advice to find out more about what could be a better way to pay back unsecured debt such as credit card bills.
An IVA is tailored specifically to deal with unsecured loans of more than £15,000, which many older Britons may have after obtaining easy credit during the boom years.
IVA advisers will also try to freeze interest rates on debts, which could stop the amount of debt spiralling out of control, and build a repayment plan to suit each case.
Some older people may find an IVA attractive because it can mean retaining full ownership of your home.
By Neil Burton
- House price rise 'may not indicate recovery'
- Equity release 'needs to be increased'
- Need for IVA help could increase as expert predicts reduction in lending
- Government announces 'breathing space' for those needing IVA help
- Lack of subprime lending creating need for IVA help, expert suggests
- IVAs may be ideal for some of the millions of Britons with debt worries
