Do You Need Equity Release?

When deciding on equity release it isn’t just about eligibility, you need to also consider suitability. Before you seek out financial advice from a qualified adviser here are a few tips to decide if it is the right product for you.

Page last updated – 1st March 2023

Checked for accuracy by:

Chris - Equity Release Editor

Do you need equity release or want it?

There is a difference – for some retirees, equity release is a need. They may have little to no savings and a significant amount of equity tied up in their property, which they need to access in order to cover essential living expenses. In this case, equity release can provide a much-needed source of income to meet basic needs.

For others, equity release is a want. They may have sufficient income or savings to cover their basic needs, but want to use their property’s equity to fund a desired lifestyle or fulfill a lifelong dream. In this case, equity release can provide the means to pursue certain wants, such as travel or home improvements.

When deciding whether equity release is right for you, it’s important to carefully consider your wants and needs. Ask yourself why you’re considering equity release, and what you hope to achieve with the funds you receive. If your primary goal is to cover essential living expenses or pay for unexpected costs, then equity release may be a need.

However, if your primary goal is to pursue certain wants or desires, then equity release may be a want and as result, it may not be a suitable option.

It’s important to keep in mind that equity release comes with potential downsides, such as reduced inheritance and inflexibility. So, it’s crucial to carefully weigh the benefits and risks of equity release and seek professional advice before making any decisions. By taking the time to distinguish between wants and needs, you can make an informed decision about whether equity release is right for you.

SWOT Analysis and Equity Release

Stay with me here…

SWOT analysis is a helpful tool for planning and decision-making. It stands for Strengths, Weaknesses, Opportunities, and Threats.

Basically, it’s a way to identify what you’re good at, what you need to improve on, what opportunities are available to you, and what challenges you may face.

By doing a SWOT analysis, you can get a better understanding of where you stand and make a plan to achieve your goals.

It’s a useful tool for both personal and business decision-making, and can help you make informed choices about your future.

The acronym SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.

In a SWOT analysis, individuals or organizations can list their strengths and weaknesses, which are internal factors that are within their control, such as resources, skills, and processes.

They can also identify opportunities and threats, which are external factors that are outside of their control, such as market trends, competition, and regulatory changes.

By conducting a SWOT analysis, individuals or organizations can gain a better understanding of their current position and develop a strategic plan to achieve their goals.

They can use their strengths to capitalize on opportunities, address weaknesses that may hinder their success, and mitigate threats that could negatively impact their operations.

Overall, SWOT analysis is a useful tool for both personal and business decision-making.

Why am I talking about this?

Well, if we take the same principles as a SWOT analysis but alter it slightly, we can have a useful way of deciding if equity release is right for you.

Here is a hypothetical SWOT analysis for a fictional person named John who is considering equity release:

Strengths (Advantages):

  • John owns a valuable property that he has lived in for many years and has paid off his mortgage
  • He has a limited pension income and wants to supplement it to enjoy his retirement comfortably
  • Equity release could provide a lump sum of cash or a regular income to help him achieve his financial goals

Weaknesses (Disadvantages):

  • John may not fully understand the risks and costs associated with equity release
  • John’s eligibility for means-tested benefits might be impacted

Opportunities (Pros):

  • Equity release could provide the funds necessary to renovate and upgrade his home, which could increase the value of the property
  • The additional income could help John to pursue hobbies or travel that he may not have been able to afford previously
  • The money released is tax free

Threats (cons):

  • John does not intend to make any repayments so the interest will compound, meaning the amount owed will increase substantially
  • If John wants to sell his house he may have to adhere to the equity release provider’s terms and conditions and be subject to an early repayment charge.
  • John will have less inheritance to leave behind

This is just a hypothetical example and that each person’s circumstances will be unique. It’s important to conduct a thorough analysis of the potential risks and benefits of equity release before making a decision.

A SWOT analysis seems to complicated for me, do you have any other tips?

Yes, below we have compiled a suitability tree for you to try which includes the most common suitability questions:

equity release suitability map


If you still want to proceed with equity release then It’s important to keep in mind that it does come with costs. The average cost to set up equity release is between £1,500 and £3,000 when taking into consideration all the fees.

Before proceeding with equity release, it’s highly recommended to seek professional advice from an Equity Release Council-approved adviser. They can help you choose the right product for you and ensure that you fully understand the implications and risks involved.