An overwhelming number of retirees do not understand equity release products, the SEQUAL-RFI Reverse Mortgage Study released yesterday has found.
According to the report, 78 per cent of over 60s surveyed had heard of reverse mortgages yet as little as 40 per cent understood the basic premise of such products.
Many of the surveyed retirees said they were frightened about the products due to negative media coverage and the proliferation of myths and misconceptions they had heard.
Further to this, the study also found that a majority of over 60s have most of their wealth tied up in their home with little cash to fund day-to-day living, revealing a need for the products in the market.
“For many of these people their home is their biggest financial asset,” SEQUAL executive director Kieren Dell said.
“It is absolutely critical that they understand all their options for releasing the equity from their home to fund their retirement they need to,” he said.
Mr Dell called on the government, consumer organisations and the media to work with SEQUAL to educate and empower retirees about using reverse mortgages.
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