Focus on: Scotland. By personal finance editor of the Scotsman
It took a while for equity release to gain popularity in Scotland but that has all changed over the last year as rising living costs take their toll.
That more people are taking this route to unlock cash from their property is no surprise. More over-55s are still paying off mortgages and other debts than ever before, while the rate of inflation facing older age groups is higher than that for the wider population, thanks to higher spending on basic foods and household energy.
A recipe for financial distress
Throw in a crisis in pensions, with many people retiring on diminished pensions and a sharp decline in the income paid by annuities, and you have a recipe for financial distress in old age.
In the first six months of 2011, 27 per cent more equity was unlocked from Scottish homes than in the same period in 2010, despite modest house price falls over the year. The number of plans taken out rose by the same amount, according to the most recent Key Retirement Solutions (KRS) data, the biggest increase in the UK.
But why have we seen such a marked increase north of the Border in the number of over-55s turning to equity release? The most obvious reason is the potent combination of rising prices and low interest rates that has ravaged the savings income on which so many retirees depend, forcing them to turn to their most valuable asset, their home, to bridge the gap.
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