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Release the equity!

Pensioners who try to unlock money that they have tied up in property often have debts of more than 25,000 pounds, according to new research.

Around a third of homeowners taking out an equity release plan use at least some of the money to clear a debt, be it mortgage credit card or loan debt. Equity release specialist Key Retirement Solutions claim the average debt is £25,418.

The study involved some pensioners who owed £90,000 on their credit cards, unsecured loans of £250,000 and mortgages of £340,000.

Dean Mirfin, group director at Key Retirement Solutions, said: ‘Pensioners, in line with the rest of the country, have struggled to borrow money in the past three years and have increasingly turned to credit cards to tide them over.

He continued: ’They are also feeling the effects of the endowment mis-selling scandal as they're coming to the end of mortgage terms and struggling to pay off mortgages as their endowments have missed payout forecasts.

‘It all adds up to a major squeeze on incomes but there is a silver lining in that they are literally sitting on considerable wealth in their own home,’ Mr Mirfin added.

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