Equity release plans on the rise again

The number of retired people unlocking money from their home increased for the first time in three years during 2010.

Around 22,020 equity release plans were taken out during the year, up from 21,305 in 2009, and ending three consecutive years of decline, according to equity release adviser Key Retirement Solutions.

But while the number of plans taken out increased, the amount of money that was unlocked declined due to the increased popularity of drawdown plans.

Drawdown plans, which enable people to unlock money in stages as they need it, accounted for 74 per cent of all equity release plans taken out during the year, up from 64 per cent in 2009.

The increased uptake of drawdown plans contributed to the average amount people unlocked from their home dropping to 43,519, from 48,212 during 2009.

Dean Mirfin, group director at Key Retirement Solutions, said: "Customers are benefiting from the flexibility and favourable terms offered by drawdown and overall the equity release market was able to end three years of decline last year in the number of plans sold.

"The true barometer for the industry clearly rests with the number of plans sold rather than total amount released."