Equity release schemes can often prove to be very useful for older homeowners that want to unlock some of the equity in their homes, but the scheme have also come under fire on a regular basis as a result of the fees that many elderly end up paying.

However, one charity is now hoping that it can save elderly homeowners that are interested in equity release hundreds or even thousands of pounds in fees through a new equity release service that it has launched.

The consumer watchdog Which? has said that the fees that are charged by advisors and equity release providers can be as high as several thousand pounds, which is a great deal for consumers to have to fork out. In addition to this the borrowers also have to cope with higher rates of interest and higher legal fees, all of which can add up to a tidy sum. Application fees and survey costs are also added to the monies that the homeowners have to pay out, and for many this turns into an extremely expensive process.

The equity release and advice service is now being launched by the charity the Consumer Credit Counselling Service. The charity has said that elderly homeowners could save themselves hundreds of pounds or even more than this because the charity will not be charging for advice and will not be receiving any commission from providers if the client does take out an equity release plan.

A CCCS spokesperson said: ‘We have spoken to several providers who say the percentage of their business from those looking to consolidate their debts has risen significantly. Our worry is that they don’t look at how their clients will cope with their other debts as they often can’t release enough to clear all their debts. Because we offer debt advice, we look at the whole picture. In some cases, the solution will be to sell their home and downsize. Equity release is just one option among many possibilities for solving debt problems.’

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