Regulator warns about pitfalls of equity release schemes

The Financial Regulator is warning people about the pitfalls of availing of equity release schemes on their homes.

Such schemes allow people to sell part of their home or take out a mortgage against the value of their home in order to gain a cash sum.

The regulator, Mary O'Dea, is warning elderly people in particular that they could often end up paying back more than twice the borrowed amount and could end up with little money to pay for long-term care.

Ms O'Dea says research has found that almost two-fifths of people aged over 50 would consider using equity release schemes and she is urging them to examine all their options and get independent advice before doing so.